DP14 – FDIC Insurance Coverage: Deposit Protection Rules, Limits & Key
Concepts
B
926D4EAD7AB14B2E85C452CBA7AB6AE6
Not answered. The correct answer is B. A is incorrect because the FDIC does not offer additional
insurance. C is incorrect because the $25,000 will not be insured at all even for a higher rate. D
is incorrect because the only communication Katherine may receive from the bank would be to
provide information on FDIC insurance coverage. - correct answer ✔✔1. Katherine has one
account at Best Bank. She has just deposited a check for $83,000 into her money market
account bringing the balance to $275,000. Assuming Katherine wants to keep her funds in
interest bearing accounts, how would the amount over $250,000 be handled under the current
FDIC insurance rules?
A. Katherine will receive a letter urging her to purchase additional insurance for the $25,000
B. The $25,000 will be uninsured
C. The $25,000 will be insured at a higher rate
D. Katherine will be asked to move $25,000 out of her account
A
F86C3CAEFCA34BD2B08B50A011E9B1CA
Not answered. The correct answer is A. B is incorrect because BIF and SAIF were created as part
of the amendments in FIRREA. C is incorrect because the Federal Deposit Insurance Act did not
originally set insurance limits. D is incorrect because the FSLIC was created to insure thrifts. -
correct answer ✔✔2. What is the primary reason the Federal Deposit Insurance Act created the
FDIC?
A. To restore confidence in the banking system by providing government insurance for bank
deposits
B. To refinance efforts of BIF and SAIF
,C. To increase insurance coverage limits
D. To insure deposits at thrift institutions
B
0B233E8C715A4903A92673E6536F3489
Not answered. The correct answer is B. A, C, and D are incorrect because the FDIC administers
the Deposit Insurance Fund (DIF). - correct answer ✔✔3. One of the FDIC's most important
functions is to insure the deposit accounts of millions of Americans in all the FDIC-insured
financial institutions across the country. What fund does the FDIC administer?
A. Federal Insurance Fund (FIC)
B. Deposit Insurance Fund (DIF)
C. Insurance Deposit Fund (IDF)
D. Secure Deposit Fund (SDF)
A
27644767674F4480BF7282CB424963E1
Not answered. The correct answer is A. B, C, and D are incorrect because accounts held in
separately chartered financial institutions are not added together and are insured separately. -
correct answer ✔✔4. James Johnson has single ownership accounts in two separately chartered
financial institutions. How does FDIC calculate the insurance coverage for James' accounts?
A. Each account is insured separately
B. Accounts are aggregated and the total is insured for up to $250,000
C. The oldest account is insured first
D. The account with the largest balance has the priority for insurance coverage
B
, AB69636ED54D4A768B2B9CF3311EB241
Not answered. The correct answer is B. A, C, and D are incorrect because a pass-through
account is one set up by a third party with funds owned by the principals of the account. -
correct answer ✔✔5. What does that term ''pass-through" deposit insurance coverage mean?
A. The account is opened by individuals who are passing through the area
B. Funds in the account are owned by the principal not the third party who set up the account
C. Ownership of the funds passes through the account to the bank
D. The FDIC passes the insurance through the account to the FDIC's insurance fund
A
19BEE64DE4DD41DEB1D1F09243845C43
Not answered. The correct answer is A. B is incorrect because any advertisement for a non-
deposit investment product may NOT contain this logo. C is incorrect because advertisements
for any non-covered product or service may NOT contain this logo. D is incorrect because
insured depository institutions must display the official ''Member FDIC'' signs at each station or
window where insured deposits are usually and normally received, both at a depository
institution's principal place of business and in all its branches. - correct answer ✔✔6. Your
marketing department wants to place an advertisement in your branch promoting a new
deposit product. Which statement provides accurate signage instructions?
A. Signage must contain the ''Member FDIC'' logo
B. Any advertisement for a non-deposit investment product must contain the ''Member FDIC''
logo
C. Any non-covered product or service must contain the ''Member FDIC'' logo
D. ''Member FDIC'' signs are only required at the financial institution's principal place of
business
C
Concepts
B
926D4EAD7AB14B2E85C452CBA7AB6AE6
Not answered. The correct answer is B. A is incorrect because the FDIC does not offer additional
insurance. C is incorrect because the $25,000 will not be insured at all even for a higher rate. D
is incorrect because the only communication Katherine may receive from the bank would be to
provide information on FDIC insurance coverage. - correct answer ✔✔1. Katherine has one
account at Best Bank. She has just deposited a check for $83,000 into her money market
account bringing the balance to $275,000. Assuming Katherine wants to keep her funds in
interest bearing accounts, how would the amount over $250,000 be handled under the current
FDIC insurance rules?
A. Katherine will receive a letter urging her to purchase additional insurance for the $25,000
B. The $25,000 will be uninsured
C. The $25,000 will be insured at a higher rate
D. Katherine will be asked to move $25,000 out of her account
A
F86C3CAEFCA34BD2B08B50A011E9B1CA
Not answered. The correct answer is A. B is incorrect because BIF and SAIF were created as part
of the amendments in FIRREA. C is incorrect because the Federal Deposit Insurance Act did not
originally set insurance limits. D is incorrect because the FSLIC was created to insure thrifts. -
correct answer ✔✔2. What is the primary reason the Federal Deposit Insurance Act created the
FDIC?
A. To restore confidence in the banking system by providing government insurance for bank
deposits
B. To refinance efforts of BIF and SAIF
,C. To increase insurance coverage limits
D. To insure deposits at thrift institutions
B
0B233E8C715A4903A92673E6536F3489
Not answered. The correct answer is B. A, C, and D are incorrect because the FDIC administers
the Deposit Insurance Fund (DIF). - correct answer ✔✔3. One of the FDIC's most important
functions is to insure the deposit accounts of millions of Americans in all the FDIC-insured
financial institutions across the country. What fund does the FDIC administer?
A. Federal Insurance Fund (FIC)
B. Deposit Insurance Fund (DIF)
C. Insurance Deposit Fund (IDF)
D. Secure Deposit Fund (SDF)
A
27644767674F4480BF7282CB424963E1
Not answered. The correct answer is A. B, C, and D are incorrect because accounts held in
separately chartered financial institutions are not added together and are insured separately. -
correct answer ✔✔4. James Johnson has single ownership accounts in two separately chartered
financial institutions. How does FDIC calculate the insurance coverage for James' accounts?
A. Each account is insured separately
B. Accounts are aggregated and the total is insured for up to $250,000
C. The oldest account is insured first
D. The account with the largest balance has the priority for insurance coverage
B
, AB69636ED54D4A768B2B9CF3311EB241
Not answered. The correct answer is B. A, C, and D are incorrect because a pass-through
account is one set up by a third party with funds owned by the principals of the account. -
correct answer ✔✔5. What does that term ''pass-through" deposit insurance coverage mean?
A. The account is opened by individuals who are passing through the area
B. Funds in the account are owned by the principal not the third party who set up the account
C. Ownership of the funds passes through the account to the bank
D. The FDIC passes the insurance through the account to the FDIC's insurance fund
A
19BEE64DE4DD41DEB1D1F09243845C43
Not answered. The correct answer is A. B is incorrect because any advertisement for a non-
deposit investment product may NOT contain this logo. C is incorrect because advertisements
for any non-covered product or service may NOT contain this logo. D is incorrect because
insured depository institutions must display the official ''Member FDIC'' signs at each station or
window where insured deposits are usually and normally received, both at a depository
institution's principal place of business and in all its branches. - correct answer ✔✔6. Your
marketing department wants to place an advertisement in your branch promoting a new
deposit product. Which statement provides accurate signage instructions?
A. Signage must contain the ''Member FDIC'' logo
B. Any advertisement for a non-deposit investment product must contain the ''Member FDIC''
logo
C. Any non-covered product or service must contain the ''Member FDIC'' logo
D. ''Member FDIC'' signs are only required at the financial institution's principal place of
business
C
