Can A Bank Ask Where You Got Money?

Florence Desiata

You may have encountered a situation in which bank personnel inquired about the source of your funds. This may appear to be an intrusive question, but it is perfectly legal.

In this article, you’ll learn why banks ask where your money is from and why you must provide truthful answers. Continue reading to learn more.

Is it Legal for Banks to Ask Where You Got Your Money?

Yes. Most banks value their customer’s privacy, but they also want to ensure that the money they receive is not acquired through illegal means. This is why they monitor your account’s inbound and outbound transfers to check if there are money laundering red flags.

Cases When Bank Tellers May Inquire About Your Deposit

Bank tellers will usually inquire where you got the money from when you deposit a large sum into your checking or savings account. When this happens, you might feel like you are being interrogated, but they’re doing it for good reasons.

The Bank Secrecy Act (BSA) mandates tracking the client’s money. This law covers financial institutions such as:

  • Rural Bank
  • National Bank
  • Federal Saving Associations
  • Agencies of foreign banks

It is in accordance with the bank’s crucial role in battling the funding of terrorism, drug trading, and vast financial crimes in any way.

Possible transactions that could prompt the teller to ask you questions include:

  • Deposits and withdrawals that concern huge sums of money
  • Large deposit of funds to a usually low-balance bank account
  • Transactions to new accounts with little banking history to assess
  • Checks from unknown or unfamiliar institutions

To avoid being questioned, deposit funds in your account that are less than $10,000, as this amount necessitates special handling. However, putting in a large amount of money when you’re a business owner is inevitable. You have to file a report and provide the essential information to complete the process.

Bottom line

Having a bank account is a lifesaver. Whether it’s for personal use or for business, it’s essential to keep track of your expenses for transparency: where it came from and where it goes.

Bank employees have the right to access your account whether you’re in front of them at the counter or not, but it is not something to be scared of as they only have a reason to do so: to protect you and your earnings.

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