Why (And When) Do Banks Ask Why You’re Withdrawing Money?


Your bank account is your bank account, and your money is your money. Therefore, your bank has no right to ask you why you’re withdrawing funds, right? Well, not really. Banks absolutely have the right to ask you why you are withdrawing money. Why and when would they do this?

Banks will ask you why you’re withdrawing money for a number of reasons. Some of the most common include withdrawals over $10,000, numerous withdrawals in a short timeframe, and withdrawals when they suspect that you could be in a state of distress.

At the end of the day, it is the bank’s responsibility to keep all of its client’s assets safe. Bank employees are trained to identify any behaviours that could raise a red flag. For further explanation, keep reading for a detailed breakdown of why and when banks ask why you’re withdrawing money.

5 Reasons Why Your Bank Could Ask You Why You’re Withdrawing Money

Banks can–and will–ask you why you’re withdrawing money for a number of reasons. Some red flags that tellers are on the lookout for include:

  • Large withdrawals – as with deposits, withdrawals over $10,000 require a special report to the IRS. Such large amounts are needed for money laundering or illicit payroll practices, so the government wants to make sure you aren’t trying to use this money “under the table”.
  • Frequent withdrawals – maybe you want to avoid filing with the IRS, so you decide to divide a large withdrawal into many smaller chunks. This will also seem suspicious and may evoke the questioning of the teller.
  • Distress – if you appear visibly flustered, nervous, emotional, or abused in any way, bank employees are trained to ask questions, as you may be the victim of coercion or another type of criminal activity.
  • Unfamiliarity – this is likely more of a concern for smaller banks or branches located in smaller towns, but if the employees don’t recognize your face as a customer, they will probably ask some questions.
  • Illicit activity in the area – in areas known for criminal activities, local law enforcement may encourage banks to be a bit more meticulous when it comes to screening cash withdrawals.

These are just a few of the many reasons why a bank may ask why you are withdrawing money. While they may be a means of initially screening for any shady activity, there is a chance they are completely innocuous and simply a teller being friendly. Something along the lines of, “Oh, headed to the casino?” or “Taking the kids to the carnival?”

How to Protect Yourself Against Your Banking Activities Being Scrutinized

I am sure none of us have any reason to hide a reason for withdrawing our money from a bank. Still, I know there are plenty of people who prefer to keep anything to do with money completely private.

To avoid raising any suspicion when withdrawing funds, here are some things that can help the transaction go smoother:

  • Have your ID ready – fraudsters and criminals hate having to show their ID. If you have your ID visible and ready to present the second you arrive at the window, the teller is likely to assume that you have nothing to hide and won’t ask any questions
  • Preempt any questions – say that you want to pay cash for a used car and need to make a large withdrawal. A great way to avoid answering questions is to ask the questions yourself. Something along the lines of “Now, is there any special paperwork I need to fill out for this?”
  • Be in a good mood – a trip to the bank can often be inconvenient and stressful. Many people have to try to cram it in during their lunch break or on their commute home. Try to smile and be respectful to your teller when making large withdrawals. It goes a long way toward assuring them that money is being used for wholesome reasons
  • Call ahead – if you are planning to make a large withdrawal, it is a great idea to call ahead and let the branch know. You may be surprised just how little cash many banks carry, so if you are planning to withdraw something more than $50,000, definitely touch base and see if they can fulfill your request

It may seem obvious, but the best way to avoid suspicion is to, well, not act suspiciously.

Do’s and Don’ts When Your Bank Asks You Why You’re Withdrawing Money

Now that you know why banks ask questions during a withdrawal it’s time to learn how to act accordingly. Let’s take a look at some do’s and don’ts if a bank asks you why you’re withdrawing money:

  • Do make good eye contact and show empathy with your teller when you answer
  • Do have your government ID, debit card, or any other documents readily available
  • Do take the initiative to facilitate the transaction, anticipating any questions the bank may have and being ready with a pleasant response/follow-up question
  • Don’t let your frustration get the best of you and cause you to act in a way that may be seen as hostile, unstable, or suspicious
  • Don’t seem desperate to get the cash and start ad-libbing far-fetched stories about why you have to have it now
  • Don’t try to use alternate forms of ID. For example, if you legitimately don’t have your government ID on you, don’t ask if your Costco membership will work

Remember, your teller is just doing their job, so try to be cooperative as possible if they ask why you are withdrawing your funds.

Final Thoughts: Why A Bank May Ask Why You’re Withdrawing Money

Banks will ask you why you’re withdrawing money if they get a hint of anything suspicious. This usually means unusually large withdrawals, unusually frequent withdrawals, or withdrawals that appear to be under duress. At the end of the day, your bank is just trying to keep your assets safe. Why not try to be as pleasant as possible when you receive these questions–regardless of how unexpected they may be.

Thanks for the read today, we hope you learned something!

Geek, out.

Noel

Noel is the founder and main contributor for his blog - Noel's passion for personal finance has helped him amass over 600k readers to his Financial Geek blog.

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