What is permissible regarding cash held in trust by a national bank?

The correct answer is that cash held in trust by a national bank can be deposited in the commercial department without restriction. This is permissible because national banks are allowed to manage and hold cash in their trust departments in a manner that aligns with the regulations governing bank operations. In this scenario, when cash is in trust, it can be utilized for operational purposes in the commercial department without encountering systemic limitations or requirements for additional approvals.

Trust cash is typically intended to be readily accessible for the purpose of fulfilling fiduciary obligations, and this flexibility allows the bank to effectively manage and utilize those funds. Such deposits do not generally carry the same restrictions that might apply to other types of accounts or deposits, since the primary function of trust assets is to serve the needs of the beneficiaries in accordance with the bank’s fiduciary duty.

In contrast, options suggesting limitations—like requiring approval by bank officials or stating that it can only be deposited up to FDIC coverage—are not applicable since the regulations do not impose such constraints on the management of trust assets. Additionally, while investing in savings may be consistent with investment objectives, it does not directly address the permissibility of cash deposit practices in the commercial department.