Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What defines a dormant account?

1. An account actively used for daily transactions.

2. An account with no activity except for interest or fees.

3. An account that has been closed by the bank.

4. An account with a zero balance.

The correct answer is: An account with no activity except for interest or fees.

A dormant account is characterized by a lack of activity beyond what is necessary to maintain the account. Specifically, it refers to an account where there are no transactions or customer-initiated activities for an extended period, with the only entries being potential interest accrual or monthly maintenance fees. This definition highlights that the account is not actively used, distinguishing it from accounts that are engaged in regular transactions. The other options fail to accurately represent the concept of a dormant account. Daily transactions do not align with dormancy, as the activity indicates that the account is actively managed. An account that has been closed would no longer be considered a dormant account since it does not exist in a state that would allow for inactivity. Similarly, an account with a zero balance does not inherently indicate dormancy unless there has also been a lack of transaction activity over the required time frame. Therefore, the defining feature of dormancy is the absence of any active input from the account holder, except for minimal transactional charges, which aligns with the correct answer.