What Happens if I Deposit More Than $10,000? | SoFi (2024)

By Mike Zaccardi, CMT, CFA ·August 07, 2023 · 8 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey.Read moreWe develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide.We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right.Read less

What Happens if I Deposit More Than $10,000? | SoFi (1)

A cash deposit of more than $10,000 into your bank account requires special handling. The IRS requires banks and businesses to file Form 8300, the Currency Transaction Report, if they receive cash payments over $10,000. Depositing more than $10,000 will not result in immediate questioning from authorities, however. The report is done simply to help prevent fraud and money laundering. You have nothing to lose sleep over so long as you are not doing anything illegal.

Key Points

• Banks are required to report when customers deposit more than $10,000 in cash at once.

• A Currency Transaction Report must be filled out and sent to the IRS and FinCEN.

• The Bank Secrecy Act of 1970 dictates that banks keep records of deposits over $10,000 to help prevent financial crime.

• Structuring a deposit is when an individual splits up several deposits so that a single deposit of more than $10,000 cash does not happen.

• Penalties for not filing Form 8300 or filing a fraudulent form include fines and possible prison sentences.

Are Financial Institutions Required to Report Large Deposits?

Banks and credit unions are required to report when a customer deposits cash over $10k. Maximum deposit limits vary by bank, but in this case, anything above $10,000 (even a penny more) is the amount to know. The Bank Secrecy Act dictates that financial institutions create a paper trail of financial activity that could be suspicious. The reasoning is that law enforcement authorities can better control money laundering activities and tax evasion by having a record of these larger deposits. Other malicious activities like terrorism, drug trading, and broad financial crimes might be prevented.

Do I Have to Report Large Deposits?

You might have to report large deposits if you own a business. (Performing a small direct deposit typically does not need to be reported.) The IRS rules also apply to financial activities performed by a business or individual. You must complete IRS Form 8300 to report any transaction or even a series of related transactions that total $10,000.

About that “series of related transactions” part: Transactions are considered related when they take place within 24 hours or if the person or business simply suspects they are related.

What Is IRS Form 8300?

IRS Form 8300 is used to help regulators prevent financial crime. The form is separate from other banking guidelines like funds availability rules. It is sent to the IRS and the Financial Crimes Enforcement Network (FinCEN). The form is used to report cash payments over $10,000 received in a trade or business.

On IRS Form 8300 , you must identify the individual from whom the cash was received and the person on whose behalf the transaction was conducted. In addition, you need to include a description of the transaction and method of payment. Additional disclosure of information may spell out the business that received the cash and whether multiple parties were involved.

What Happens When Deposits Are Reported?

A paper trail of potentially suspicious deposits is created after Form 8300 is transmitted to the IRS. Depositing cash at an ATM or with a bank teller, so long as it is below the $10K threshold, will usually not be reported. Law enforcement agencies can use the paper trail for future investigations if conditions warrant it.

To understand this in a bit more detail, know that first, when a cash deposit of more than $10,000 is reported, you are identified through your Social Security number (SSN) and other personal information. FinCEN is now tracking you, but once again, it is nothing to be concerned about if you are following the law.

What Is the Bank Secrecy Act?

The Bank Secrecy Act of 1970, mentioned above, may sound somewhat intimidating. What it actually does is require that banks keep records of each customer who deposits more than $10,000 in cash at one time in a single account. The paper trail is sent to various law enforcement groups to track where the money moves to. The Bank Secrecy Act includes civil and criminal penalties for entities not complying with the requirements. Moreover, the 2001 Patriot Act made the Bank Secrecy Act broader; it can now better detect activity related to terrorism. Again, this is nothing to be concerned about as long as you aren’t engaged in any illegal activities like bank fraud.

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Reporting the Deposit

Here is the answer to “What happens if I deposit more than $10,000?” There are several steps involved in reporting a cash deposit over $10,000, whether that’s made to a standard or premium checking account or a savings account. There is likely nothing to be concerned about if you are just going about your daily business and not involved in illegal activity.

Banks Must Verify ID and Other Important Information

The Currency Transaction Report is used to verify a depositor’s information. The SSN, name, and address are provided to the FinCEN.

Banks Will Review All Cash Transactions

Financial institutions go through all their channels when a suspicious deposit over $10,000 is made. A series of several smaller amounts that sum to a deposit of more than $10,000 is also treated as a large deposit. Cash put into an account at a teller window or through an ATM can be linked and considered a structured deposit (more on that below). These are much more serious potential events than everyday banking activities, such as making a small cash deposit or ATM withdrawal.

Banks Will Determine If You Are Structuring Deposits

Structuring a deposit is when an individual splits up several deposits so that a single deposit of more than $10,000 cash does not happen. Someone might do this to avoid the bank having to file Form 8300 to the IRS and resulting in a paper trail. This suspicious activity raises red flags as it suggests someone is intentionally trying to fly under the regulators’ radar. If a bank determines someone is structuring, then that activity might face additional scrutiny.

All Information Will Go Into a Currency Transaction Report

The personal information and deposit details mentioned earlier go into a Currency Transaction Report within 15 days of the transaction being considered. Reports are kept on file at the bank for five years, too. Once again, however, most people need not be too concerned with this, provided your banking is legal. Rather, it may be better to focus on account basics, like savings account withdrawal fees, not the ramifications of pernicious illegal activity, as long as they are following all the laws.

Penalties for Non-Compliance

You may wonder what happens if an individual tries to skirt the protocols described above. Here are details:

• Civil penalties for not filing Form 8300 include fines of $250 per return. If this is considered to be intentional disregard, the fine can be the greater of $25,000 or the amount of cash received in the transaction up to $100,000.

• Criminal penalties for not filing Form 8300 or filing a fraudulent form include a monetary fine of up to $250,000 for individuals and $500,000 for businesses. Prison sentences of five years are also a possible penalty for non-compliance.

Are There Any Exemptions to Consider?

A bank can file for an exemption if one of its business customers routinely deposits over $10k. It’s important to know that some businesses cannot get an exemption. For example, law firms, pawn dealers, accounting firms, and trade unions are some corporation types for which the IRS will not grant an exemption.

The Takeaway

You don’t have anything to worry about if you deposit more than $10,000 in cash, assuming you are doing nothing wrong. A large deposit is simply reported by a bank to regulators to track possible suspicious activity. Businesses must also file IRS Form 8300, a Currency Transaction Report, within a specific time frame after a $10,000 cash payment. Structuring deposits (breaking up funds into smaller amounts for deposit, so as to avoid filing a form 8300) is another no-no. Since there are significant penalties for attempting to skirt the law, it’s wise to not attempt such moves.

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How much money can I deposit in the bank without being reported?

A deposit over $10k is the amount to consider; amounts under that threshold may not have to be reported. There’s a catch, though: If a customer makes several small cash payments or deposits within a 12-month window, filing Form 8300 might have to be done should the payments or deposits exceed $10,000. These are known as “structured” deposits and can raise red flags if not reported.

How often can you deposit $10,000?

You can deposit more than $10,000 whenever you’d like, but just be aware that the receiving financial institution is required to report those funds to the IRS. If you are a business owner and depositing over $10k in cash is a frequent practice, the bank can file an exemption after the first large deposit to avoid filling out future reports to the IRS.

How do you explain a large deposit?

Depositing over $10k only results in an IRS form being filed by the bank. You often won’t have to do anything to explain it unless you are suspected of fraud or money laundering. While many individuals wonder, “What happens if I deposit $10,000 or more?” the authorities are not going to arrive at your doorstep the next day. The money is deposited like any other amount would be.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circ*mstances.

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What Happens if I Deposit More Than $10,000? | SoFi (2024)
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