Withdrawing $10,000 or More From Your Savings? Here's What You Need to Know

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Most of the time, when you head to an ATM to withdraw money from your bank account, you're probably looking at $100 here or $200 there. It's not an everyday thing that you're raiding your savings account to the tune of $10,000 or more.

But there may come a point when you do need to take out an ultra-large sum at once. Maybe you're buying your neighbor's used car. Maybe you're paying a contractor in cash because using a credit card will result in a surcharge.

You have the right to withdraw your money for any reason you want, provided you're not using it to buy anything illegal. For example, it's not okay to withdraw $10,000 and spend it on a supply of cocaine (though to be fair, it's not okay to withdraw any amount of money and buy cocaine). But if you decide to take out $10,000 and spend it on video games, hey, that's your call.

However, you should know that a withdrawal above $10,000 will trigger a report under the Bank Secrecy Act. And you should also know that this is not necessarily a big deal.

The back story

The Bank Secrecy Act was put in place to prevent criminals from engaging in illegal activity such as money laundering. This made it so that banks have to report cash withdrawals above $10,000 to regulators.

How does that affect you? Well, it may not affect you at all.

Just as it's common to do your banking electronically, so too are these reports generated automatically. But you don't have to wait for an official to review that report before you're granted access to your money.

Generally, you're able to take your withdrawal and walk away. If something on that automatically generated report raises any suspicions, you might hear about it. Otherwise, you can take your money and move on.

And even if you do get contacted about your withdrawal, there's nothing to worry about if it was legitimate. However, for your own protection, it's a good idea to have documentation for how you spent it. So if you handed it over to the contractor who put up your new fence, have them write up a receipt confirming that they received that sum when they did.

A large withdrawal may get flagged and force you to wait

In some cases, transferring a large amount of money from one bank account to another or taking a large withdrawal might raise a red flag and cause your transaction to be blocked and delayed. But this can happen at amounts lower than $10,000. If a $1,000 transaction is flagged as fraudulent, you might face delays despite that being a much smaller sum.

Or, you might run into a situation where your $5,000 transaction is blocked due to nothing more than a system glitch on the part of your bank. These things happen all the time (think CrowdStrike's recent outage).

So if you know you're going to need a large sum of money from your bank account, don't wait until the last minute to get it. You never know when you might hit a snag, and you don't want to end up with a mess on your hands due to circumstances outside your control.

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