What Happens if You Deposit More Than $10,000 in Your Bank Account?

If you find yourself depositing $10,000 or more in your bank account, it's likely accompanied with celebratory gestures. Socking away $10,000 in a top-rated checking account, whether as savings or to help pay down debt, is not something most of us do everyday. Most of us are happy with saving $1,000 or less, let alone 10-times that much. 

While saving $10,000 may be a happy moment for you, it can actually constitute suspicious behavior in the eyes of the federal government. The very act of depositing that amount alone will trigger a report from your bank to the federal government. If you're about to deposit $10,000 or more, here's what you should know. 

Banks report cash deposits totaling $10,000 or more

Banks have to report any deposits above $10,000 to the IRS on a form known as the Currency Transaction Report. Yes -- even if it's only $10,000.01.

It's not just deposits, either. Banks are required to report any transaction over $10,000, including withdrawals. And if you think you can avoid reporting by separating your big transactions into smaller ones, you'd be wrong. This is known as "structuring," and banks will report that, too. For example, if you deposit $3,000 today, $3,000 tomorrow, and $4,500 two days from now, your bank would report the transactions to the IRS.

Now, don't get the wrong impression -- the IRS isn't necessarily going to hound you because you deposited $10,000 in a bank account. The federal reporting is in place to help the federal government track financial crimes, so as long as you're not doing anything illegal, the federal government likely won't care.

Nor should you let this reporting stop you from putting a large sum in your bank account. Socking cash in a personal safe means missing out on earning interest in a high-yield savings account. If you haven't already opened a high-yield savings account, check out our curated best-of list to snag the highest rates.

How to legally deposit $10,000 or more

The best way to deposit $10,000 or more is simply to do it. Don't structure the deposits or try to evade reporting requirements. If you don't want to draw attention to yourself, then just deposit the money and go about your day.

On the other hand, you'll likely run into problems if you try to break big deposits into smaller chunks with the purpose of evading the federal government's vigilance. Even if you're not doing this with illegal intent -- such as you simply want to be left alone and don't want the federal government tracking your activities -- it could lead to unnecessary problems down the road.

All in all, banks are still the safest place to store your money. When you make deposits at an FDIC-insured bank, your money is insured up to $250,000 per depositor, per ownership category. (Joint accounts are insured up to $500,000.) What's more, you can withdraw this money freely, even if a large transaction does trigger a report.

If you're depositing $10,000 into an account intending to keep it there for the long run, make sure you're earning interest on it. A savings account is a good option, and so is a money market account -- check out our list of the best money market accounts right now.