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Banking MCQs Quiz

  • A fixed deposit for a particular time to earn interest is known as

    (A) bond
    (B) current account
    (C) savings account
    (D) Certificate of Deposit

    The answer is: (D) Certificate of Deposit
    Banks offer certificate of deposits (CDs) and pay interest to customers who deposit their money for a fixed term.

  • What is the difference between CDs and Savings Accounts?

    I. CDs have fixed time but savings accounts have not
    II. CDs have fixed interest rate but savings accounts have not
    (A) I only
    (B) II only
    (C) I and II
    (D) I or II

    The answer is: (C) I and II
    Certificate of deposits (CDs) usually have a fixed time period for which a fixed interest is paid.

  • Which of the following is NOT a debt by a bank to its customers?

    (A) CDs
    (B) bonds
    (C) mortgages
    (D) Savings accounts

    The answer is: (C) mortgages
    Mortgages are loans offered by a bank to its customers.

  • What is the function of a central bank (or a state bank)?

    (A) taking deposits from the people
    (B) implementing monetary policy
    (C) lending to businesses
    (D) determining inflation and tax rates

    The answer is: (B) implementing monetary policy
    Central bank is required to implement monetary policy of the central government.

  • A REPO or repurchase agreement is a form of short-term _____ by the central bank.

    (A) borrowing
    (B) savings
    (C) investment
    (D) adjustment

    The answer is: (A) borrowing

  • Which banking service enables customers to make fixed payments at regular intervals?

    (A) credit card
    (B) credit transfer
    (C) standing order
    (D) Certificate of Deposit (D)

    The answer is: (D) standing order

  • Monetary Policy of a country is managed by its

    (A) commercial banks
    (B) investment banks
    (C) central bank
    (D) finance ministry

    The answer is: (C) central bank
    Monetary Policy of a country is managed by its central bank.

  • In banking system, the term CD means

    (A) Credit or Debit
    (B) Confidential Debt
    (C) Certificate of Debt
    (D) Certificate of Deposit

    The answer is: (D) Certificate of Deposit

  • A bank is generally a/an _____ institution.

    (A) public
    (B) financial
    (C) policy
    (D) investment

    The answer is: (B) financial

  • Most of the banks in a country are

    (A) commercial banks
    (B) investment banks
    (C) national banks
    (D) state banks

    The answer is: (A) commercial banks
    Most of the banks in a country are commercial banks which deals with the general public.