Can You Get in Legal Trouble for Depositing Too Much Money in Your Bank Account?
Putting a lot of cash into your bank account? Keep reading to learn what happens behind the scenes at the bank if you do.
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Depositing money in your bank account is something that you have the right to do. However, there are actually some rules that you need to know about large deposits. Specifically, these rules affect deposits totaling $10,000 or more.
Making a big deposit like this triggers some extra requirements and, in some cases, if you do it the wrong way, you could find yourself facing legal trouble. Here's why.
There are special rules for bank account deposits topping $10,000
Let's say you make a deposit into your checking account and the value of that deposit is $10,000 or higher. There's a rule called the Bank Secrecy Act that requires your bank to report this transaction.
The bank will basically just provide some details of your transaction to the federal government. You aren't going to have to do anything special usually, except confirm whatever identifying information the bank requests, since the bank has the responsibility of completing the forms.
The purpose of this requirement is to try to catch people engaged in illegal behavior. If large transactions are reported, it is harder to get away with crimes like tax evasion or money laundering.
The good news is, as long as you aren't doing anything illegal, the fact that the bank reports your $10,000 (or greater) deposit isn't going to have any real impact on your life. You won't get into legal trouble for depositing your own money and federal agents are not going to come knocking at your door.
Breaking up big deposits into small ones could lead to big trouble
While you should be perfectly fine depositing $10,000 or more into your bank account, there is an exception to this rule -- even if you aren't laundering money or trying to cheat the IRS.
You can get into legal trouble if you break up that deposit into multiple smaller deposits to try to avoid the reporting requirement. This is true even if you got the money perfectly legally. If you break up a deposit with the goal of trying to evade the reporting requirements imposed by the Bank Secrecy Act, this is a criminal offense called structuring.
Structuring is illegal under any and all circumstances, and banks can recognize it. When they do, they will file a report of suspicious activity, which can be referred to the Financial Crimes Enforcement Network (FinCEN). You could find yourself facing an investigation into your attempts to hide your big deposit from the government if this happens to you.
No one wants to come under federal investigation. So be sure to avoid behaviors that might look like you are trying to avoid the reporting requirement. This could include making a bunch of deposits that add up to more than $10,000 over a few days, or making a bunch of deposits that come in just under the reporting limit, like regularly depositing $9,900.
If you can avoid these behaviors and aren't doing anything illegal, you don't have to worry about making large deposits at all. Of course, when you are depositing a lot of money, it often makes sense to try to earn interest on it if you can, so consider a high-yield savings account for your next big deposit.
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