Have you ever found yourself staring at a large check and wondering, “Can I just walk into my bank and deposit this?” If you’re holding a $20,000 check, that’s definitely a valid concern! The simple answer is yes, you can deposit a $20,000 check—but there are some important things you should know before heading to the bank
As someone who’s worked with banking customers for years, I’ve seen the confusion and sometimes anxiety that comes with depositing large amounts. Let’s break down everything you need to know about depositing that $20,000 check safely and legally.
The Short Answer: Yes, But There Are Rules
You can absolutely deposit a $20,000 check into your checking account. However, unlike smaller deposits, there are specific regulations, reporting requirements, and potential holds on your funds that you should be aware of.
What Happens When You Deposit More Than $10,000
According to the Bank Secrecy Act, banks are required to file Currency Transaction Reports (CTRs) for cash deposits exceeding $10,000 While your $20,000 deposit is by check rather than cash, it’s still important to understand these reporting requirements
Currency Transaction Reports (CTRs)
When you deposit $10,000 or more in cash, your bank will file a CTR with the Financial Crimes Enforcement Network (FinCEN), which is part of the U.S. Department of the Treasury. This report includes:
- Your full name
- Account number
- Social Security number
- Taxpayer identification number
Don’t panic! As Herman Thompson Jr, a certified financial planner, explains “The creation of a CTR does not mean that your account will be frozen, nor that the Men in Black will be visiting your home” It’s just standard procedure to help prevent money laundering and other financial crimes.
What About Check Deposits?
For check deposits like your $20,000 check, the reporting requirements are different. Banks don’t typically need to file a CTR for check deposits (as opposed to cash), but they may still flag unusually large transactions for review.
Hold Periods on Large Checks
One of the most important things to understand about depositing a $20,000 check is that you likely won’t have immediate access to all the funds.
“Large transactions usually have a hold period of two to seven days to verify the authenticity of the check and the ability of the payor to meet the obligation,” says Thompson. Sometimes, depending on your banking relationship and the source of the check, this hold period could be even longer.
Typically, your bank will make a portion of the funds available immediately (often the first $225 or more), with the remainder becoming available as the check clears through the banking system.
Avoiding Structuring: A Serious No-No
Some folks might think they can avoid scrutiny by breaking up a large deposit into smaller ones. For example, depositing $9,000 today and $11,000 tomorrow instead of the full $20,000 at once. This practice is called “structuring,” and it’s actually illegal.
Sean K. August, CEO of The August Wealth Management Group, warns: “Depositing $8,000 in an attempt to avoid the $10,000 AML (Anti-Money Laundering) limit is a form of structuring, which is illegal. If the bank suspects that you are trying to avoid the $10,000 limit by making multiple deposits of less than $10,000, they may still report the transaction to FinCEN, and you may face penalties and legal consequences.”
Be Prepared to Provide Documentation
When depositing a check as large as $20,000, your bank may ask about the source of the funds. This isn’t because they’re being nosy—it’s part of their due diligence.
“You may be asked to provide additional information about the source of the funds, such as invoices, receipts or other documentation,” says August.
Common sources of large checks that banks typically find acceptable include:
- Inheritance payouts
- Insurance settlements
- Sale of property or vehicles
- Tax refunds
- Legal settlements
- Retirement account distributions
Having documentation ready will make the process smoother. This might include a copy of a will, a sales agreement, or other relevant paperwork.
Check Your Account Limits
Before heading to the bank with your $20,000 check, it’s worth checking whether your specific bank account has any deposit limits. Some accounts come with maximum deposit restrictions, and these vary by institution.
Call your bank or check your account terms and conditions to confirm that you can deposit the full amount. Some banks might also charge fees for processing exceptionally large deposits, so it’s good to ask about this in advance.
Ensure Your Bank is FDIC-Insured
When depositing large sums like $20,000, make sure your bank is FDIC-insured. This insurance protects the money in your accounts up to $250,000 per depositor, per bank, in case the bank fails.
Most reputable banks in the U.S. are FDIC-insured, but it never hurts to verify, especially when dealing with large sums of money.
Watch Out for Scams and Fraud
Unfortunately, scammers often target individuals expecting large checks. Before depositing a $20,000 check, make absolutely sure it’s legitimate.
Common check scams include:
- Someone sends you a large check and asks you to send part of the money back
- Lottery or prize winnings you weren’t expecting
- Inheritance from unknown relatives
- Job offers that involve depositing checks and transferring money
As Lyle Solomon, principal attorney at Oak View Law Group, advises: “If the source of the funds is unclear or suspicious, be careful. For example, if someone offers to pay you a large sum of money for a service or product, or if you receive an unexpected windfall from an unknown source, it’s important to be cautious and investigate the situation further.”
The Practical Steps for Depositing a $20,000 Check
Now that we’ve covered the regulations and considerations, here’s a practical step-by-step guide for depositing your $20,000 check:
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Call your bank in advance: Let them know you’ll be depositing a large check. This courtesy call can help ensure they’re prepared and can advise you on any specific procedures.
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Bring identification: Bring your driver’s license or other government-issued ID. For large deposits, identification verification is standard.
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Endorse the check properly: Sign the back of the check only when you’re at the bank, not before. Some banks also require you to write “For Deposit Only” along with your signature.
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Fill out a deposit slip: Include your account number and the check amount.
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Speak with a teller: For a deposit this size, it’s better to work with a human teller rather than using an ATM.
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Ask about hold times: Get clear information about when the funds will be available for use.
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Request a receipt: Keep this documentation for your records.
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Follow up: Check your account in the coming days to ensure the deposit processes correctly.
Mobile Deposit Options for Large Checks
Many banks now offer mobile deposit through their apps, which lets you deposit checks by taking a photo with your smartphone. However, for a $20,000 check, there are some important considerations:
- Check your mobile deposit limits: Many banks cap mobile deposits at lower amounts, often between $5,000 and $10,000 per day.
- Extended hold times: Mobile-deposited large checks often have longer hold times than in-person deposits.
- Endorsement requirements: Mobile deposits usually require special endorsements like “For Mobile Deposit Only” along with your signature.
If your bank’s mobile deposit limit is below $20,000, you’ll need to deposit the check in person at a branch or ATM (though in-person is recommended for such large amounts).
What About Business Checks?
If you’re a business owner receiving a $20,000 check, there are additional considerations. Businesses must file Form 8300 with the IRS within 15 days of receiving cash payments over $10,000. While this doesn’t apply to checks per se, businesses should maintain thorough records of all large deposits for tax and accounting purposes.
The Bottom Line on Depositing a $20,000 Check
Yes, you can deposit a $20,000 check into your bank account. The process isn’t complicated, but it does come with some additional scrutiny and waiting periods compared to smaller deposits. The key points to remember are:
- Be prepared for a hold on some or most of the funds
- Don’t try to structure deposits to avoid reporting
- Be ready to explain the source of the funds if asked
- Watch out for potential scams
- Use in-person banking for the best experience with large deposits
By understanding these guidelines, you can confidently deposit your $20,000 check without unnecessary stress or complications. And remember, having to deal with depositing a large check is generally a good problem to have!
FAQs About Depositing Large Checks
How long will my bank hold a $20,000 check?
Typically between 2-7 business days, though it can be longer depending on your banking relationship and the origin of the check. Your bank may make the first $225 available immediately.
Will I have to pay taxes on a $20,000 check deposit?
The deposit itself isn’t taxable, but the source of the funds might be. For example, if it’s income, a gift, or certain types of distributions, there could be tax implications. Consult with a tax professional if you’re unsure.
Can I cash a $20,000 check instead of depositing it?
While technically possible at some banks, most institutions won’t have that much cash readily available without advance notice. Additionally, walking around with $20,000 in cash presents serious security risks. Depositing the check is almost always the safer option.
Will my bank report my $20,000 check deposit to the IRS?
Check deposits aren’t automatically reported to the IRS the way cash deposits over $10,000 are. However, banks do monitor for suspicious activity, and the IRS can access bank records during audits.
Have you ever had to deposit a large check? What was your experience like? I’d love to hear your stories in the comments below!
Notice: Historical Content This is an archival or historical document and may not reflect current law, policies or procedures.
Although many cash transactions are legitimate, the government can often trace illegal activities through payments reported on complete, accurate Forms 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business PDF. Here are facts on who must file the form, what they must report and how to report it.
Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file a Form 8300. By law, a “person” is an individual, company, corporation, partnership, association, trust or estate. For example, dealers in jewelry, furniture, boats, aircraft or automobiles; pawnbrokers; attorneys; real estate brokers; insurance companies and travel agencies are among those who typically need to file Form 8300.
Tax-exempt organizations are also “persons” and may need to report certain transactions. A tax-exempt organization doesnt have to file Form 8300 for a charitable cash contribution. However, under a separate requirement, a donor often must obtain a written acknowledgement of the contribution from the organization. The organization must report noncharitable cash payments on Form 8300. For example, an exempt organization that receives more than $10,000 in cash for renting part of its building must report the transaction. See Publication 526, Charitable Contributions, for details
For Form 8300 reporting, cash includes coins and currency of the United States or any foreign country. Its also cash equivalents that include cashiers checks (sometimes called a treasurers check or bank check), bank drafts, travelers checks or money orders with a face amount of $10,000 or less that a person receives for:
- A designated reporting transaction or
- Any transaction in which the person knows the payer is trying to avoid the reporting requirement.
Note that money orders and cashiers checks under $10,000, when used in combination with other forms of cash for a single transaction that exceeds $10,000, is defined as cash for Form 8300 reporting purposes.
A designated reporting transaction is the retail sale of tangible personal property thats generally suited for personal use, expected to last at least one year and has a sales price of more than $10,000. Examples are sales of automobiles, jewelry, mobile homes and furniture.
A designated reporting transaction is also the sale of a collectible, such as a work of art, rug, antique, metal, stamp or coin. Its also the sale of travel and entertainment, if the total price of all items for the same trip or entertainment event is more than $10,000.
Note that under a separate reporting requirement, banks and other financial institutions report cash purchases of cashiers checks, treasurers checks and/or bank checks, bank drafts, travelers checks and money orders with a face value of more than $10,000 by filing currency transaction reports.
A person must file Form 8300 if they receive cash of more than $10,000 from the same payer or agent:
- In one lump sum.
- In two or more related payments within 24 hours. For example, a 24-hour period is 11 a.m. Tuesday to 11 a.m. Wednesday.
- As part of a single transaction or two or more related transactions within a 12 month period
New or used automobile dealers
If a husband and wife purchased two vehicles at one time from the same dealer, and the dealer received a total of $10,200 in cash, the dealer can view the transaction as a single transaction or two related transactions. Either way, the dealer needs to file only one Form 8300.
- A dealership doesnt file Form 8300 if a customer pays with a $7,000 wire transfer and a $4,000 cashier check. A wire transfer isnt cash.
- A customer purchases a vehicle for $9,000 cash. Within 12 months, the customer pays the dealership cash of $1,500 for accessories for that vehicle. The dealer doesnt need to file Form 8300 unless the accessories purchase was related to the original vehicle purchase.
When lease payments made in cash by a taxi driver to a taxi company within a 12-month period exceed $10,000 in total, the taxi company needs to file Form 8300. Then, if the company receives more than $10,000 cash in additional payments from the driver, the company must file another Form 8300.
This 12-month period also applies to landlords who need to file Form 8300 once theyve received more than $10,000 in cash for a lease during the year. If a person uses a dwelling unit as a home and rents it less than 15 days during the year, its primary function isnt considered rental in a trade or business, so they dont need to report a cash receipt of more than $10,000.
A bail-bonding agent must file Form 8300 when they receive more than $10,000 in cash from a person. This applies to payments from persons who have been arrested or anticipate arrest. The agent needs to file the form even though they havent provided a service when they received the cash.
Colleges and universities must file Form 8300 if they receive more than $10,000 in cash in one or more transactions within 12 months. A Form 8300 exception applies for government entities but not for educational entities.
Contractors must file Form 8300 if they receive cash of more than $10,000 for building, renovating, remodeling, landscaping and painting.