Certified Financial Management Specialist Practice Exam

What is the process called when a customer places funds into a bank account?

1. Withdrawal

2. Deposit

3. Loan

4. Transfer

The correct answer is: Deposit

The process of placing funds into a bank account is called a deposit. When customers deposit money, they are essentially adding funds to their account, thereby increasing the balance available for future transactions. This can be done through various means, such as depositing cash at a bank branch, using an ATM, or transferring funds electronically from another account. Depositing funds is a fundamental banking activity that allows individuals and businesses to manage their finances, save money, and earn interest on their account balances. It contrasts with other banking terms like withdrawal, which involves taking money out of an account, or a loan, which refers to borrowing money that must be repaid. Transfers relate to moving funds between different accounts, but the act of placing money into an account is specifically described as a deposit.