For a long time, the figure of $10,000 has been the threshold above which banks must report to the federal government. In recent years, the threshold has been halved to $5,000. Banking systems are now scrutinizing all transactions of $5,000 or even less.
It is commendable that the government is increasingly monitoring smaller transactions, even though inflation has caused citizens’ purchasing power to plummet. However, this change is not seen as a radical new law, but rather as a tightening of surveillance under the Bank Secrecy Act (BSA). Although federal agencies such as the Financial Crimes Enforcement Network (FinCEN) maintain that they are not trying to punish honest citizens who sell their cars or take out loans, but rather want to stop financial crime, they are still inconveniencing us every time we try to make a slightly large deposit.
Deposits over $5,000
The best-known requirement of the Bank Secrecy Act (BSA) of 1970 is the fixed threshold of $10,000: when a customer makes several cash transactions totaling more than $10,000 in a single business day, the bank is required to file a Currency Transaction Report (CTR) with FinCEN. The fact that a CTR is triggered does not imply that a crime has been committed, but simply creates a necessary paper trail for the government.
However, one detail is that the bank can add up multiple transactions; if, for example, you deposit $6,000 in the morning at one branch and $5,000 in the afternoon at another bank, the bank is aware that both transactions were made on the same day, and since they add up to a total of $11,000, the CTR will be triggered.
The invisible threshold
However, the CTR is not the only document that is triggered automatically. There is also the Suspicious Activity Report (SAR), which is triggered by customer behavior, not by a fixed amount. If the bank suspects an attempt to evade the law, the legal amount for filing a SAR is $5,000.
Reports focus on activities that appear to be illegal, such as money laundering, fraud, or attempts to evade the $10,000 report. This is where things start to get murky: banks are legally prohibited from informing the customer that a SAR has been filed against them. This is how government agencies ensure that the investigation is not hindered.
Bank monitoring systems are increasingly sophisticated algorithms. They not only look for large deposits, but also monitor how each customer uses their account. If they see a clear deviation from what the customer usually does with their money, they can trigger an internal review. If that review proves unsatisfactory, it can result in a silent filing of a SAR.
The fact is that banks and the government are not stupid: they know perfectly well that people will try to bypass the CTR that appears automatically if they deposit $10,000 directly. However, structuring—which is the intentional act of dividing a large sum of cash—is very easy for the bank to detect, and can also have legal consequences. Ultimately, federal law punishes the intent to evade reporting, not just the illicit origin of the money.
If this money came from a legitimate source such as the sale of a car or a business, but structuring this payment into smaller deposits is still a crime, which will be reported by the bank via a SAR.
Federal penalties for structuring include fines of up to €250,000 and possible prison time.
How to make a large deposit
Don’t worry, making a large cash deposit at the bank is still perfectly legal. You just need to be transparent, honest, and cooperative with the bank staff. If you are depositing a large amount, the bank staff will obviously need to ask questions.
If the amount of cash exceeds $10,000, we recommend that you deposit the entire amount at once. Although this will trigger the CTR, it will demonstrate your honesty and show that you are not trying to structure the money into smaller amounts. You will need to bring documentation that proves the legal source of the money, such as a sales contract, invoice, or inheritance documents.