The best way to deposit a large inheritance check is into a secure, FDIC-insured high-yield savings account, money market account, or CD to keep funds safe while planning. If the check is made out to "The Estate of [Name]," it must be deposited into a dedicated estate account by the executor, not a personal account.
The best place to deposit the large cash inheritance is in a federally insured bank or credit union account.
Park your money
There are a few options, including modest interest-paying certificates of deposit, money market accounts, or Treasury bills, to name a few—though for the longer term, these kinds of investments may be too conservative. Consider consulting a financial professional to talk through your specific scenario.
Sometimes, what to do with an inheritance is as much about what you should not do with your inheritance money.
Roth IRA
A Roth IRA is a retirement account funded with after-tax dollars. In exchange, your retirement withdrawals are income-tax-free, including your investment gains. This tax-free treatment continues when your heirs inherit the Roth IRA, making this another effective asset to leave behind.
The majority of banks don't limit how much cash you can deposit, but all institutions have to report deposits of $10,000 or more to the federal government. It's safest to deposit large sums in person, but you could opt for an armored transport for sums greater than $50,000.
Yes, cash deposits or payments over $10,000 in a single transaction (or related transactions) are reported to the IRS by the business or bank, not you directly, using Form 8300 (for businesses) or a Currency Transaction Report (CTR) (for banks), to combat money laundering and financial crimes, but a legitimate deposit doesn't mean you're in trouble unless it's part of illegal structuring.
Any cash or check transactions exceeding $10,000, or a series of smaller transactions designed to avoid reporting thresholds (“structuring”), will be reported to the IRS by banks as required by the Bank Secrecy Act.
The "7-year inheritance rule" (primarily a UK concept) means gifts you give away become exempt from Inheritance Tax (IHT) if you live for seven years or more after making the gift; if you die within that time, the gift may be taxed, often with a reduced rate (taper relief) applied if you die between years 3 and 7, but at the full 40% if you die within 3 years, helping people reduce their estate's taxable value by giving assets away earlier.
How does the IRS find out about inheritance from parents? The estate itself is required to report asset transfers via various tax forms (like Form 706 for estate tax or Form 1041 for estate income). These forms alert the IRS to the assets.
Inheriting $100,000 or more is often considered sizable. This sum of money is significant, and it's essential to manage it wisely to meet your financial goals. A wealth manager or financial advisor can help you navigate how to approach this.
But if the check is written to the deceased person or to the “Estate of [Name],” then only the estate account can accept it. So unless you've been given official authority by the court or the check is specifically in your name, the bank isn't going to let you cash it.
Cash deposit limit in your Savings Account
As per the Reserve Bank of India (RBI) guidelines, you can deposit up to ₹50,000 into your Savings Account without furnishing your PAN card details. However, if you want to deposit a higher amount, you will need to provide your PAN card details.
You can deposit any amount of cash without being automatically flagged if it's under $10,000 in a single transaction, but banks must report deposits of $10,000 or more to the IRS via a Currency Transaction Report (CTR). While large, legitimate deposits are fine, making multiple deposits to stay under $10,000 (structuring) is illegal and triggers Suspicious Activity Reports (SARs), leading to potential account freezes or law enforcement scrutiny, so transparency with your bank is best for large sums.
A cash deposit of more than $10,000 into your bank account requires special handling. Your bank must report the deposit to the federal government. That's because the IRS requires banks and businesses to file Form 8300 and a Currency Transaction Report, if they receive cash payments over $10,000.
It's generally not fully safe to keep $500,000 in one bank account because the standard FDIC insurance limit is $250,000 per depositor, per bank, per ownership category, meaning $250,000 is at risk if the bank fails. To fully protect the entire $500,000, you need to structure it across different ownership categories (like single, joint, trust accounts) or use multiple banks to spread the funds, leveraging separate $250,000 coverage for each.
What to do with an inheritance
The best place to deposit the large cash inheritance is in a federally insured bank or credit union account. Putting the inheritance in a savings account is a good option for the short term.