The money in your bank account belongs to you, so it would seem that you can do whatever you like with it, including withdrawing large amounts of cash. You can in fact do so, but large withdrawals are subject to certain rules. The federal government requires banks to report both deposits and withdrawals of $10,000 or more. Your bank may also have some rules you must follow. While they can't stop you from accessing your own money, they may need time to gather enough cash on site. Large withdrawals require both identification and an explanation. If you provide both of these things and have ample time, your transaction will go smoothly.
In 1970, the U.S. passed the Bank Secrecy Act into law to help prevent money laundering. After 9/11, the Patriot Act added additional requirements to the BSA in an effort to de-fund terrorism. Under these laws, your bank must report any cash withdrawals or deposits of $10,000 or more to the IRS. You aren't allowed to work around the law by making several smaller deposits or withdrawals. Known as structuring, the act of intentionally making small withdrawals to avoid IRS reporting is illegal.
For reporting purposes, your bank must count all of the withdrawals you make in a single day. This means that making a cash withdrawal of $5,000 in the morning and another $5,000 withdrawal in the afternoon will still result in a report to the IRS. Your bank must also report you if they suspect that you're making large withdrawals a few days apart in an effort to avoid the reporting mandate of the BSA.
The BSA further requires your bank to ask for identification for large withdrawals. If you're a frequent and well-known customer at your bank, they may allow you to withdraw cash without providing identification. The law forbids this on large withdrawals, however. Even if your teller knows you by name, she must ask you for identification if you withdraw $10,000 or more.
The federal government's rules allow you to withdraw as much money as you like, as long as it's properly reported. Your bank, however, may have other plans. Contrary to popular belief, banks don't have massive amounts of cash lying around. Banks clearly keep cash on hand, but storing large amounts of it on site is inherently dangerous and simply not done. Depending on how much cash you want, the bank will need a few days to transport the money to the branch.
Your bank is also allowed to ask you why you want the money. Refusal to explain the need for an unusually large cash withdrawal can result in a denial. If the withdrawal is large enough to require IRS reporting, your bank's report must include the reason for the withdrawal. If you refuse to provide one, the bank can refuse the withdrawal request and report you to the authorities.
Getting it Done
Keep in mind that the intent of these rules involves preventing money laundering and other illegal activities. They aren't meant to keep you from your money. If you want to make a large cash withdrawal, bring your identification with you to the bank and openly explain the reason for your withdrawal. Read the terms of your account to see if the bank needs time to prepare such a large withdrawal. If they do, submit your withdrawal request to the bank in writing or file any forms the bank requires in a timely manner. Never wait until the last minute when making a large withdrawal. If you complete the proper forms, allow enough time and present valid identification, you'll have no trouble getting your cash.
- Banks that serve businesses in cash-heavy industries are more likely to have large sums of cash on hand, as are main branches. A branch in a supermarket probably won't have very much cash handy.
- Instead of withdrawing large sums of cash, you can also take out large quantities of money in a cashier's check or transfer it to another bank through a wire transfer.
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