How Withdrawing $10,000 From Your Bank Could Cause You a Headache

Motley Fool08-03

KEY POINTSThe Bank Secrecy Act requires banks to report withdrawals totaling $10,000 or more.If you break a large withdrawal into smaller withdrawals to purposely evade the Bank Secrecy Act, you could...

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After all, it's your money. Even if it's a large amount -- say $10,000 -- who's to say withdrawing it would call for an investigation?Well, as it turns out, withdrawing $10,000 or more from your bank could create suspicion, especially if you're doing it frequently. While it won't automatically cause the FBI to bang on your door and rope swing through the windows, it could create a headache if you're not careful. So, if you're frequently withdrawing large amounts of cash, here's what you should know.If you withdraw $10,000 or more, your bank will file a CTREver since the Bank Secrecy Act of 1970, banks are required to report any transaction involving $10,000 or more to the federal government, whether it's a cash deposit or a withdrawal. Often, a bank's software will automatically file a Currency Transaction Report (CTR) electronically for transactions that exceed that amount, even if you're not aware of it.Though it might seem like a violation of your privacy, the Bank Secrecy Act helps the federal government track and prevent financial crimes, like money laundering. When banks fail to report large cash transactions, criminal and suspicious activities can fly under the radar. For example, the bank Wachovia -- now a part of Wells Fargo -- once let billions of drug cartel money flow through its vaults simply because it wasn't reporting large transactions to the federal government.Our Picks for the Best High-Yield Savings Accounts of 2024American Express® High Yield SavingsAPY4.25%Rate infoCircle with letter I in it.4.25% annual percentage yield as of August 2, 2024Min. to earn$1Open Account for American Express® High Yield SavingsOnAmerican Express'sSecure Website.Member FDIC.APY4.25%Rate infoCircle with letter I in it.4.25% annual percentage yield as of August 2, 2024Min. to earn$1UFB Portfolio Savings AccountAPY5.15%Rate infoCircle with letter I in it.To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.Min. to earn$0Open Account for UFB Portfolio Savings AccountOnUFB'sSecure Website.Member FDIC.APY5.15%Rate infoCircle with letter I in it.To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.Min. to earn$0Western Alliance Bank High-Yield Savings PremierAPY5.31%Rate infoCircle with letter I in it.5.31% annual percentage yield (APY) is accurate as of 7/11/2024 and subject to change at the Bank’s discretion. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.Min. to earn$500 to open, $0.01 for max APYOpen Account for Western Alliance Bank High-Yield Savings PremierOnWestern Alliance Bank'sSecure Website.Member FDIC.APY5.31%Rate infoCircle with letter I in it.5.31% annual percentage yield (APY) is accurate as of 7/11/2024 and subject to change at the Bank’s discretion. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.Min. to earn$500 to open, $0.01 for max APYTo be sure, a $10,000 withdrawal isn't a criminal activity in itself. In fact, the Financial Crimes Enforcement Unit (FinCEN, the unit that investigates financial crimes) receives so many uninteresting CTRs a day, you won't trigger suspicion through a large withdrawal alone. But there are some activities that will put greater vigilance on your bank account. The most common is called structuring.How a series of small withdrawals could make your life more difficultStructuring involves breaking up a large cash withdrawal into smaller parts with the intent to evade the Bank Secrecy Act's reporting requirements. For instance, if you withdraw $15,000 in total from your high-yield savings account, but break it into three $5,000 withdrawals, the transaction might be seen as structuring.Of course, you could have good reasons for making a series of withdrawals totaling $10,000 or more. Your bank may only let you withdraw a certain amount of money per day, thereby forcing you to break large withdrawals into smaller ones. Or it could just be a coincidence that you withdraw $5,000 today, $2,500 tomorrow, and $3,000 in two days.If you do it frequently, however, your bank could report it as suspicious activity. Once flagged, structuring could embroil you in a legal investigation. At that point, if you're caught intentionally evading a bank's reporting requirements, you could face criminal or financial charges. Yes, even if you're just a private citizen who doesn't want the government tracking your life.Most people have nothing to worry aboutTruthfully, unless you are engaging in something illegal, you have nothing to worry about. FinCEN knows large withdrawals and deposits happen everyday. It's not concerned with legal cash flows. Only when you behave suspiciously will you find yourself under investigation.The best way to withdraw $10,000 or more, then, is to simply do it. Don't try to break it into smaller installments or spread out your withdrawals over multiple days. Just keep withdrawing as you normally would, and you won't run into any serious financial headaches.These savings accounts are FDIC insured and could earn you 14x your bankMany people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 14x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2456578592"}