Here's What Happens When You Withdraw $10K -- It's Not What You Think

Withdrawing $10,000 from your checking or savings account might not be a big deal for some. But no matter the reason, your bank's going to let the federal government know about it.

Here's what happens when you take out $10,000 or more -- and why you probably don't need to worry about it.

Your bank files a report with the government

Financial institutions must file a report -- known as a Currency Transaction Report, or CTR -- for any cash withdrawal or deposit over $10,000. The report then goes to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

This is to help prevent money laundering, fraud, and organized crime. The report also includes your name, account details, transaction amount, and how the money was taken out -- in cash, check, or other form.

You might think you can dodge the CTR by withdrawing $5,000 now and $5,000 later. But your bank may file a Suspicious Activity Report (SAR) even for withdrawals under $10,000 if they believe you're trying to game the system.

You don't need to be notified for a SAR to be filed. It just gets quietly sent to the government -- and it stays there.

The IRS finds out, too

The CTR is shared with several agencies, including the IRS. That's not a big deal so long as you're doing nothing illegal, but it could lead the IRS to take a closer look at your finances.

If your tax returns show little income, but you're moving large amounts of cash, for example, the IRS could decide to investigate.

The takeaway: Don't panic, but don't try to hide anything

Taking $10,000 out of your checking or savings account isn't illegal or even uncommon. But it also doesn't happen without the government taking notice.

If you need to take out a large amount of money, just do it all at once. If anyone asks what it's for, be honest. There's nothing wrong with accessing your cash, but transparency is key. And if you're not committing fraud or doing something else illegal, you shouldn't have any reason to worry.