Bottom line. ATMs are an excellent resource for depositing cash. Depending on where you live, it may be easy to access an ATM from a big bank to deposit your money. While many online banks are limited in their ability to accept cash deposits, there are some options available to make it easier on you.
Use an ATM at a physical bank, not a freestanding one. Don't deposit cash to an out of network ATM. And consider using a live teller if it's a very large amount.
For some people and businesses, it's normal to deposit large amounts of cash (sometimes in a series of transactions), and there are legitimate reasons for doing so. If you have any concerns, discuss your account activity with your bank.
If your branch is closed or you don't want to wait in line, you can deposit cash with the ATM. Making cash deposits through ATMs is the closest you'll get to a cash deposit made directly at the bank itself. What's more, most banks and credit unions have far more ATM locations than they do physical bank branches.
Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000. But since many criminals are aware of that requirement, banks also are supposed to report any suspicious transactions, including deposit patterns below $10,000.
Banks and financial institutions must report any cash deposit exceeding $10,000 to the IRS, and they must do it within 15 days of receipt. Of course, it's not as cut and dried as simply having to report one large lump sum of money.
The Bank Secrecy Act is officially called the Currency and Foreign Transactions Reporting Act, started in 1970. It states that banks must report any deposits (and withdrawals, for that matter) that they receive over $10,000 to the Internal Revenue Service.
The Short Answer: Yes. The IRS probably already knows about many of your financial accounts, and the IRS can get information on how much is there. But, in reality, the IRS rarely digs deeper into your bank and financial accounts unless you're being audited or the IRS is collecting back taxes from you.
If you deposit more than $10,000 cash in your bank account, your bank has to report the deposit to the government. The guidelines for large cash transactions for banks and financial institutions are set by the Bank Secrecy Act, also known as the Currency and Foreign Transactions Reporting Act.
If an ATM eats your deposit, you should contact your bank immediately, says Kristopher Dahl, a spokesman for Wells Fargo. That will spur an examination of the incident.
The cash-dispensing mechanism has an electric eye that counts each bill as it exits the dispenser. The bill count and all of the information pertaining to a particular transaction is recorded in a journal.
ATMs can make mistakes. And when they do, it can cost you time and money to clean them up. They can account a deposit amount incorrectly, dispense too little or too much cash, fail to give a receipt and keep a customer's banking card.
There's no legal limit on how much money you can keep at home. Some limits exist with bringing money into the country and in the form of cash gifts, but there's no regulation on how much you can keep at home.
Foreign or "offshore" bank accounts are a popular place to hide both illegal and legally earned income. By law, any U.S. citizen with money in a foreign bank account must submit a document called a Report of Foreign Bank and Financial Accounts (FBAR) [source: IRS].
Can I Withdraw $20,000 from My Bank? Yes, you can withdraw $20,0000 if you have that amount in your account.
Insurance proceeds and dividends paid either to veterans or to their beneficiaries. Interest on insurance dividends left on deposit with the Veterans Administration. Benefits under a dependent-care assistance program.
The law states that a U.S. bank may take its depositors' funds (i.e. your checking, savings, CD's, IRA & 401(k) accounts) and use those funds when necessary to keep itself, the bank, afloat.
The Takeaway
So, can the government take money out of your bank account? The answer is yes – sort of. While the government may not be the one directly taking the money out of someone's account, they can permit an employer or financial institution to do so.
If potential money laundering or violations of the BSA are detected, a report is required. Computer hacking and customers operating an unlicensed money services business also trigger an action. Once potential criminal activity is detected, the SAR must be filed within 30 days.
Depositing a big amount of cash that is $10,000 or more means your bank or credit union will report it to the federal government. The $10,000 threshold was created as part of the Bank Secrecy Act, passed by Congress in 1970, and adjusted with the Patriot Act in 2002.
If you make a deposit of $10,000 or more in a single transaction, your bank must report the transaction to the IRS. Your bank also has to report the transaction if you make two deposits of $10,000 or more within 24 hours of each other.
Millionaires also have zero-balance accounts with private banks. They leave their money in cash and cash equivalents and they write checks on their zero-balance account. At the end of the business day, the private bank, as custodian of their various accounts, sells off enough liquid assets to settle up for that day.
It's far better to keep your funds tucked away in an Federal Deposit Insurance Corporation-insured bank or credit union where it will earn interest and have the full protection of the FDIC.
Cash at Home Earns No Interest
Long-term, this is the biggest risk because you're guaranteed to lose money. If you make a practice of keeping several thousand dollars in cash at home, it's effectively dead money. Not only does it not earn interest, but it actually declines in value.