Banks and federal regulators are vigilant in the fight against money laundering. For this reason, the United States has laws to prevent individuals or businesses from making unlimited fund transfers and regulations on recording large transactions that could be suspicious. This is not to say that the rules are so inflexible that you can’t do business. You just have to be aware of the laws and your responsibility in following them.
Internal Transfer Limits
Theoretically, you can transfer any amount as long as you have the funds. One obstacle you might encounter, however, is your lender’s internal transfer limits. This is the maximum amount you can transfer in a set time period per your bank’s policy.
For example, you might be allowed to transfer up to $500,000 per day at one bank, but only $350,000 at another. In either case, although the bank allows large transfers, it still must report those over a certain amount.
Number of Transactions
Most accounts have no limit on the number of transfers per month. However, under the Federal Reserve Board's Regulation D, savings and money market accounts have a limit of six transfers in a single month. This includes preauthorized transactions such as bill payments, automatic transfers, phone payments or online transfers. It doesn't include ATM withdrawals from that account, but it does include overdraft protection transfers.
If you anticipate multiple overdraft transfers in a month, you’ll need to consider an overdraft line of credit which has no limit on the amount of monthly transfers. If you exceed that six-transfer limit, the bank will assess a penalty. Exceed the limit continuously and the lender may close the account or change it to another type that allows more than six monthly transfers.
Currency Transaction Report
While you can make large transfers depending on your bank’s policy, the bank must report wire transfers over $3,000 and any transaction over $10,000. These Currency Transaction Reports (CTRs) are filled out, usually electronically, by the bank and forwarded to the Financial Crimes Enforcement Network (FinCen).
Failure to fill out this report can result in regulatory action, including fines and sanctions, against the bank. The bank is responsible for filling out the report, but it does not have to inform the customer unless he or she requires such information. There is no illegality in making a large transfer as long as a CTR is properly submitted.
Suspicious Activity Reports
While there is no penalty for having to report a large transaction with a CTR, the bank must complete a Suspicious Activity Report (SAR) if it detects any attempt at deception or wrongdoing. For example, if a customer reduces his request for a transfer from $10,000 to $9,500 after being informed of the CTR, the lender must proceed with the original request and transfer $10,000. If the customer cancels the transfer entirely, the bank representative must still complete an SAR.
Bank representatives are trained to identify any pattern that might be associated with money laundering or avoiding a CTR. For example, suppose a customer makes multiple $5,000 deposits totaling $50,000 over a period of 15 days. If that activity is out of the ordinary for that particular account, an SAR is warranted. An SAR must be filed with FinCEN within 30 days of the suspicious activity, or the bank is subject to fines and sanctions.
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