Here's What Happens if You Deposit More Than $10,000 in Cash Into Your Checking Account

Imagine a person sells a classic car or piece of property for $20,000. They deposit the money into their checking account while deciding what to do with it. They came by the money legitimately, yet their bank is legally required to report the deposit by filing a Currency Transaction Report (CTR).

Thanks to the Bank Secrecy Act of 1970 and the PATRIOT Act of 2001, banks are the first line of defense against financial crimes like money laundering. Failure to file a report can lead to fines and a possible prison sentence. Whether you deal with a brick-and-mortar or online bank, the rules are the same.

In the 1970s, the rule was intended to make it more difficult for criminals to launder money. After the 9/11 attacks, it began to focus more on the potential funding of terrorist activity.

What you should know

If you've ever deposited more than $10,000 into checking, you can be sure that a CTR was electronically transmitted to FinCEN, a bureau within the U.S. Department of Treasury. Unless you were involved in illegal activity, you likely had no idea a report had been sent.

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Disclaimers

SoFi disclosure:

¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/26. See full bonus and annual percentage yield (APY) terms at sofi.com/banking#1.

² SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

³ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.

⁴ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional

FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at SoFi.com/banking/fdic/terms

See list of participating banks at SoFi.com/banking/fdic/receivingbanks

⁵ We’ve partnered with Allpoint to provide you with ATM access at any of the 55,000+ ATMs within the Allpoint network. You will not be charged a fee when using an in-network ATM, however, third-party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

⁶ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

⁷ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. 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. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage.

That's because FinCEN knows there are thousands of reasons why someone might deposit more than $10,000 into their checking account, the vast majority of which are 100% innocent. FinCEN hopes to identify those few bad actors making deposits.

And it's not just U.S. dollars. The law applies to deposits or withdrawals of any U.S. or foreign currency, including cashier or traveler's checks, bank drafts, and money orders.

Trying to skirt the rule

The fastest way to raise a red flag with a bank is to try to skirt the $10,000 rule by making smaller deposits. Whether you break the funds up and deposit them over a series of days or deposit smaller amounts into several different banks, it's called "cash structuring" or "smurfing," and banks are keenly aware that it happens.

Between bank employees specially trained to spot smurfing and transaction monitoring software designed to catch the practices, those determined to skirt the law are bound to be disappointed. And the penalties can be harsh for those involved. Once convicted of this federal felony crime, a person faces substantial fines and up to five years in prison. The government may also charge the perpetrator for tax evasion in addition to cash structuring.

Smurfing

The term "smurfing" refers to a type of cash structuring, but with a twist. Smurfing occurs when a group of individuals are recruited to accept cash and deposit it in different banks. It works like this:

• Let's say Sam needs to launder or hide money but wants to avoid detection.
• Sam finds five people needing cash and offers to pay them to make deposits. These are the "Smurfs."
• The Smurfs are instructed to open a handful of bank accounts. They may use their own names to open a few, and Sam may provide them with false identities to open the others.
• Each time Sam gives a Smurf cash, they must break it down into smaller amounts and spread their deposits among all the bank accounts they've opened.
• In return, Sam gives them a payment for each job completed.

Once caught, Sam is in legal peril, but so are the Smurfs. It doesn't matter if they didn't know what they were doing was illegal. As long as they participate, they're on the hook for the crime.

The takeaway

There are two essential things to keep in mind regarding CTRs:

1. As long as you have nothing to hide, you have nothing to worry about. Even if a report is sent, it will soon be cleared, and you'll never know it happened.
2. If anyone ever asks you to make deposits on their behalf, say no. No matter how much they offer to pay you, it won't be worth the potential penalties.

Finally, as intrusive as some people may find this law, its design is to protect us all. It's all about ensuring that our banking system is not used to harm society as a whole.