Future Business Leaders of America (FBLA) Agribusiness Practice Test

Why is a social security number required when opening a bank account?

1. For identification purposes

2. To open a joint account

3. To increase account limits

4. To apply for loans

The correct answer is: For identification purposes

A social security number is required when opening a bank account primarily for identification purposes. Financial institutions must verify the identity of their customers to comply with various regulations, including the USA PATRIOT Act, which mandates checking a customer’s identity to prevent money laundering and fraud. The social security number serves as a unique identifier that helps banks confirm a person's identity against various records. Other options, while relevant in different contexts, do not directly address the primary reason for the requirement of a social security number when opening a bank account. For instance, opening a joint account may involve needing social security numbers for all account holders, but it is not the sole reason for their necessity. Similarly, increasing account limits or applying for loans may require personal information, but these actions are not the foundational purpose for needing a social security number upon account creation.