I’m a Finance Expert: 6 Important Tips If You Need To Withdraw More Than $1,000 in Cash
According to the Federal Reserve’s most recent data, the average ATM cash withdrawal is only about $198. So, for most people, the idea of withdrawing $1,000 or more in a single day — or even in the span of several days — isn’t all that prevalent. But what about when you do need to break free of the norm and take out a large sum?
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Most bank ATMs have limits on just how much you can withdraw. You might not be able to take out $1,000 in a single transaction or even in a single day. And while you can generally withdraw more than $1,000 from your local branch, there are still certain restrictions and limits.
Here’s what you need to know about withdrawing more than $1,000 in cash and how to do so safely and without drawing too much attention — or accumulating pesky fees.
Inform Your Bank Ahead of Time
The first thing you’ll want to do is make sure your financial institution is aware that you plan to withdraw $1,000 or more. This can help avoid any issues — like them flagging or freezing your account for suspicious activity.
“Banks usually have specific restrictions on cash holdings,” said Bill Ryze, a certified chartered financial consultant and board advisor at Fiona. “Customers planning to make large withdrawals must communicate with their banks. They can guide the process and provide the necessary forms or instructions.”
When contacting your bank, you may also want to confirm that the funds are readily available in cash form. This shouldn’t usually be a problem, but it doesn’t hurt to be prepared — especially if you need the cash quickly.
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Know Your Account Limits (and Be Prepared)
“Banks stipulate daily withdrawal ATM limits for safety,” said Ryze. “They usually range from $300 to $1,000. Therefore, you must visit a bank branch to withdraw cash exceeding the set limits.”
You can contact your bank and ask about their daily, weekly or monthly withdrawal limits. Depending on the bank size and the type of account you have, you might see stricter limits — sometimes no more than $400 or $500 a day.
If you go in person to withdraw money, you’ll need to bring some form of identification.
“The bank is within its rights to verify your identity when you withdraw large amounts,” said Ryze. “I suggest you bring proper identification, such as your driver’s license or passport.”
You may also need to request a formal withdrawal by signing a withdrawal slip or check.
Avoid Structuring Your Withdrawals
Under federal law, banks must report any transactions — withdrawals, deposits, transfers and currency exchanges — that add up to $10,000 or more (some exemptions apply).
This $10,000 threshold was chosen as part of the Bank Secrecy Act, which Congress passed in 1970 and later adjusted in 2002. The main purpose of this law is to limit or prevent money laundering and similar illegal activities.
If you only need to withdraw a couple thousand dollars, you probably don’t need to worry about this law. But if the goal is to take out $10,000 or more, it’s something to be aware of.
“I suggest planning your cash withdrawals carefully to reduce the risk of structuring,” said Ryze. Structuring is essentially when you try to withdraw $10,000 or more over a few days or so to avoid getting flagged or reported to the IRS. It’s illegal and can lead to greater repercussions.
If you actually do need to take out $10,000 or more, notify your bank and keep records so that you have them in case you need them.
Be Aware of Any Fees
Understanding your bank’s fees is also important before withdrawing any money, but especially if you need over $1,000.
“Please check your bank account withdrawal terms and conditions to understand any fees or penalties associated with exceeding withdrawal limits,” said Ryze.
Large cash withdrawals sometimes come with excessive transaction fees. If you’re trying to take the money from an ATM not belonging to your branch, you could also be charged with out-of-network ATM fees.
Some banks offer ATM fee reimbursements up to a certain amount. But you can also avoid these fees by choosing an in-network ATM or by making an in-person withdrawal at your bank.
Be Safe About Those Withdrawals
When it comes to withdrawing large sums of money, make sure you’re doing it in the safest way possible.
“Your security is a significant concern,” said Ryze. “I advise prioritizing security and looking for reputable banks that use advanced encryption methods to protect your financial information.”
When it comes to taking out cash from an ATM, choose one you recognize. While you’re at it, avoid making a withdrawal during particularly busy times or from highly trafficked machines. You never know when someone might be looking over your shoulder.
You can also visit your local branch during off-peak hours — like an hour or so after they’ve opened but just before the lunch rush. Not only does this mean shorter wait times and potentially more personalized customer service, but it can also reduce security concerns.
And if you want to be extra cautious, see if your bank has a special counter or area where you can make your withdrawal without anyone else around. Set up mobile banking alerts to verify your transactions and give you greater peace of mind as you go about your day.
Plan Ahead (and Use Alternative Methods)
“Create a budget and plan your expenses to avoid frequent large cash withdrawals,” said Ryze. This can also be a smart way of keeping track of your finances and avoiding other potential issues like overdrawing from your account — and getting hit with those overdraft fees.
Along with planning ahead, consider alternatives besides cash withdrawals.
“Explore alternatives like writing out a check or paying digitally,” Ryze suggested. “They are safer than large cash withdrawals because you can trace the money trail.”
Plus, checks and debit cards usually have much higher limits. If you do plan on scheduling a large transaction, be sure to notify your bank still to avoid complications.
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This article originally appeared on GOBankingRates.com: I’m a Finance Expert: 6 Important Tips If You Need To Withdraw More Than $1,000 in Cash
