Thursday, June 30, 2022

Withdrawing "too much" of your own cash???


I received an e-mail yesterday from a Canadian reader calling himself "Algyploreable".  He's preparing for hard times, just as many of us are, and recounts this incident.

[We have] a "larder" in our spare room that we resupply as we use and we have finally taken the plunge and had a safe installed so that we can have a ready supply of cash/silver on hand. We cashed out a chunk of our investments, the monetary value of which was deposited with our bank here in Canada.

Yesterday I went to our local branch to ask how much notice I needed to give to withdraw $XX thousand in cash, assuming that it would be 24/48hrs. The young teller I was speaking to said that her supervisor was on vacation until next week but if I came back on Monday she could help me. I told her that I needed the money by Friday, and that there must be someone who could facilitate that. She started an email exchange with the branch manager, asking me a question every now and then. One of the questions was "are you buying something?". Canadian banks were only too happy to freeze customer accounts at the behest of the Turdeau government during the Trucker Convoy, so I thought I'd better play their game and told her I was indeed buying a piece of equipment. After much to and fro between the teller and the manager she told me that because the amount was over $25000 a request would have to be put in to a team at head office to see if they would authorize the release of the money. If the authorization was granted I could hopefully get the money in 10 days. This is money that had been deposited by a recognized investment institution......I had not rolled in the week before with a duffel bag full of soiled twenties to deposit.

I became quite angry at this point, however I was cognizant that I was on many cameras and that other tellers were in earshot. I had my hands open, palms down on the counter (no fists) and I told the teller very politely that I wanted "MY" money by the weekend, not whenever the bank authorized me to get it. This led to a flurry of email exchanges and I was asked to take a seat and the manager would come and speak to me. The manager attempted to explain that the steps put in place were for my security as most people don't take that amount in cash from the bank. He suggested that I get a bankers draft to pay for the item I was buying. Time to play their game again. I told him that the guy selling the equipment was giving me a fantastic deal but that he only wanted cash and it needed to be by the weekend. The manager said that he was unable to process that amount in cash without putting in a request to "the team", and asked if I could wait. When I told him I couldn't he did try to come up with a solution (credit where it's due). As long as the amount was under $25000 he was able to authorize that amount, however he would have to order the cash to be delivered next week as they don't hold that amount at the branch. He could also increase my daily cash withdrawal limit so that I could make up the lump sum shortfall through ATM withdrawals over a period of time. I pointed out that if he could authorize amounts under $25000 that I would be happy to do numerous withdrawals that way, over a couple of weeks. Apparently "the team" views that as one withdrawal, but if I could wait three or four months between those withdrawals it wouldn't raise any flags. Once I agreed to the lump sum and daily ATM increase it was time to ask some questions again......all done with a smile and a concerned tone. The old non-conspiratorial me would have told him where to go, but in this brave new Canada I concocted a story that even impressed me. If things go as planned I will have all MY money in the safe by the end of next week.

This is a cautionary tale for Canadians, I have no idea what the banking establishment in the US is up to. It is very obvious here that the bank does not consider your money to be yours and needs some form of government approval for the withdrawal of large sums. Having to wait for the branch to have the required funds on hand is one thing, but needing authorization to withdraw your own money, regardless of the amount, is mind-boggling. When SHTF I can only imagine what an eye-opener it will be for people who think they can waltz into the bank and withdraw their savings. Cash will indeed be king for a while, for those who have it. Any of your Canadian readers might want to think about turning that savings account at the bank into useable funds now while the going is (relatively) good.

I'm sure US banks will be equally obstructionist, not necessarily because they want to, but because government agencies like the IRS want to keep track of big sums in cash.  I was told some years ago by a banking official in Tennessee that if a customer demanded a substantial sum in cash, he'd most likely get it in new banknotes, in serial number order, as received from the printing facility.  That means the IRS, DEA and other agencies know where the block of $100 notes, serial numbers XXXX1 through XXXX9, have gone.  If they show up in the course of normal commerce, the agencies can follow individual banknotes back through the system to figure out where and when they first appeared.  That, in turn, may help identify what that customer bought with them, and possibly where and from whom.  It's not perfect, but it's a lot easier than trying to track used banknotes in no particular sequence.

(This is also why central bank digital currency, or CBDC, is such an attractive concept to the powers that be.  It would completely supplant paper money or coins.  Your income, plus any government support, etc., would be deposited directly into your CBDC account, and you'd spend it by transferring sums from that account to whoever you were buying from.  There would be no cash withdrawals, and every transaction would be traceable.  You'd lose all privacy when it came to buying and selling.  The IRS would know every penny you received and how you spent it;  the DEA, FBI and other agencies would be able to follow your transactions and decide whether any appeared "suspicious", and if so what they were going to do about them;  and so on.  Even better, after an initial period (to allow you to hand over your existing cash in exchange for CBDC's), the use of existing cash can be banned, and the notes declared worthless.  If you happen to have a lot of cash on hand that you daren't deposit, for fear the IRS or others would ask questions about where it came from and its tax status, you'd lose your money. It's a statist's wet dream.)

Miss D. and I aren't wealthy, but we've long made it our policy to keep at least one month's routine expenditure on hand, in cash, just in case.  It won't go far if things go to hell in a handbasket, but if we hit an interruption in normal banking for a few weeks, it'll help keep our heads above water.  I'd love to increase that to six months' supply of cash, but that simply isn't feasible on our income.  (On the other hand, we do have a small stash of 1oz. silver rounds, which are fairly readily accepted by people in our area as a cash equivalent, and they'd stretch our emergency cash further.)  I hope and trust that my readers have made similar arrangements, even if it's only one week's cash on hand.  It can make a powerful difference when the lights go out, and credit or debit cards can no longer be used.

Have any readers recently tried to withdraw large sums in cash in the USA?  How did it go?  Any problems?  Please tell us about them in Comments.



Unknown said...

Don't have the links in front of me, but some U.S. banks are ALREADY that intrusive with large cash withdrawals.

They have to counter fraud, theft, hostage money, and other such scenarios, often by law, regulation or lawsuit risk. You should have known granny was only taking the money out under duress. You should have known that was a drug dealer.

I don't like it either, but at the moment, not a worry.

Chris Nelson said...

We have had issues depositing large checks and withdrawing large sums from banks and credit unions.

Two exceptions that one might consider. Most banks are less restrictive around times of income tax refunds, they know that people make large purchases around that time. Also lower end consumer banks such as those that have branches in Walmart are used to customers that deal in cash. Also have more than one financial institution, it gives you options.

A good solution is to make smaller withdrawals over a period of time and stick them in a home safe or deposit box. A few hundred dollars every pay period adds up quickly. It's still tracked, but doesn't raise such a red flag like a larger sum would.

If the bank/credit union has Christmas Club or Vacation Club accounts, these are expected to have large seasonal withdrawals or transactions. Also have a good excuse prepped such as going to auctions, flea market, gambling, side business involving cash, etc...

Another tactic is to buy items that can be sold for cash without much loss. Not actually money laundering if the initial funds, items and exchange are legal. Examples can be buying items at Sams/Costco/Amazon for those folks that don't have memberships and don't want to be tracked.

None of this advice will confuse a detailed audit, but if enough people blend their purchases and finances, it will create noise and prevent a more detailed picture of the financial households involved. Realize that banks/organizations/governments can create a decent profile of an individual/family. Anything you can do to make their insight into your personal business more opaque isn't necessarily bad.

blogger said...

Just to amplify what Chris just said, the goal should be being obscure enough to fly below the radar of automated tracking. If someone really wants to track this it will be possible but will need to be manual - which is expensive for them. Automated is so cheap that it's essentially free, so that's what you want to avoid.

Chris' suggestions are excellent for that.

- Borepatch

JNorth said...

I haven't seen any issues in the $5-7k range but I would not be surprised if my closest credit union or bank branch might have an issue with $25k, they both have larger branches across town though. I too keep about a months worth of cash in the safe.

Keep in mind, the banks have to report and transaction around $10k. The law actually says 10k and over but then the feds wanted to see any that they wanted to see any that they wanted to see any that might be trying to avoid that 10k limit, whatever the f' that means so the actually amount banks report to the feds varies with the bank.

Rick T said...

I think the Feds call multiple under-limit withdrawals "structuring" and that gets their attention too, and possibly even more than a single >$10k transaction.

riverrider said...

my wife went to withdraw 5k from our bank, a national chain. they wanted to know why. when she said noyb, they said okay but they didn't have enough hundreds so gave her a huge stack of fifties. they said if it had been more, there would have been a wait and paperwork involved.

Dad29 said...

As Unknown mentioned above, banks are aware that fraudsters often go after older people, asking them to withdraw large amounts. SOME banks actually care about their elderly customers enough to ask questions and/or to make those withdrawals more challenging.

Stan and Mary McQueen said...

I didn't have any problem, other than making sure that the branch had enough cash, in withdrawing $23K to buy an RV from a guy who had been burned by forged cashier's checks and who therefore preferred cash. This was from a local credit union. They didn't even ask what I wanted the money for.

mauser98k said...

Canadian banks will not have $25,000 on hand for one withdrawl

Bank of Canada act

a request must be made to deliver said sum for pick up at a later date

Peteforester said...

I took out $5KUS a couple of years back to buy a used tractor. The teller said "What are you going to do with the money; 'going to Vegas?" I politely told her that if she would tell me what she did with her money, I'd tell her what I was doing with mine. She told me her manager was "encouraging" the tellers to ask this question to anyone withdrawing "substantial amounts." I told her that the RICO laws required this for amounts over $10K, and that probing on amounts less than than was none of the bank's business. She shut up, handed me my cash, and I left... ...There's the law, and then there's intrusion... Push back whenever possible...

Scrivener said...

Cotinuing with Chris Nelson's theme (above) and Borepatch's, small amounts over time can add up quickly. One tip, though - it helps to stay under the radar by randomizing amounts and dates. ATM withdrawals of the maximum allowable amount every Tuesday will draw attention, but random, lesser amounts on random dates probably won't.

The trick is to start withdrawals last year.....

Seriously, take your time, be patient, you'll get ther sooner than you think.

nick flandrey said...

Yeah, and if you get cash for selling at a yardsale or craigslist, leave it as cash.


Divemedic said...

Depositing a check larger than $250K requires approval from the Vice President of the bank. If it's a bank transfer of more than $500k, they go get her right away (it was a woman).
Withdrawing $10K or more in cash requires an IRS cash activity report. That's just the law.
Withdrawing large amounts (over $10K) and they ask a lot of questions, even by cashier's check. Less questions if it is a bank transfer.
With amounts that high, the VP of the bank gets to know you on sight in short order. Once that happens, there are very few problems after that.

Aesop said...

Why anyone keeps anything more than just enough to cover their checks (and whatever balance it takes to erase monthly fees) in the bank's pocket baffles me no end.

Cash and precious metals are king.

Plastic and digital 1s and 0s are fiatbux, and will spend just fine - until they won't.

Plan ahead.

You should already be your own 9-1-1 and supermarket for all routine concerns. Go the next step, and be your own bank.

Divemedic said...

Holding cash sucks. Any cash that you have is worth significantly less than it was last year. Same with cash denominated assets like savings accounts. Anyone who didn't see the market crash coming wasn't paying attention to Biden's campaign promises.

I have some PMs, but those have done as well as cash over the past two years. The biggest problem with PMs is that there is a loss when you buy in, and a loss when you sell. For example: Spot gold is $1812/oz as I write this. One ounce Eagles are selling at $1925. That's a 6% loss when you buy. The same place is buying 1 ounce Eagles for $1700. So a 6% loss when you sell. So gold is a 12% loser right off the bat.

So let's say that you bought gold 5 years ago at $1200. Six percent cost means that ounce cost you $1275. Now you go to sell, and that ounce gets you $1700. A 33% increase in 5 years is a return of 5.77 percent. If you had bought it 10 years ago, the rate of return is even worse. The spot was $1580 then, meaning that your cost was 1675 for a one ounce Eagle. Selling at 1700 would mean that you made a rate of return of effective zero.

The key here is to be balanced. And pay attention. I got out of the stock market last November, because the signs were there that a correction was coming.

bobby said...

"Selling at 1700 would mean that you made a rate of return of effective zero."

But, PM's are sort of dual-purpose. Key point is that your asset remained your own. Had it kept up with or bypassed currency, that would just be the gravy.

Were I Canadian, for example, I'd be withdrawing $$ and buying PM's to about 1/3 of my holdings. It's a hedge.

Jonathan H said...

I haven't had banks hassle me over the amount; I have run into a branch not having enough money for the withdrawal I wanted to make, so I had to go to a bigger branch a few miles away.
They've been open when they had to file a report and asked my occupation for the paperwork.

Genji said...

Funny thing is that under the evil thumb of the super baddy Fu Manchu Chinese Communist Party, I don't have any issues with depositing and withdrawing large-ish amounts of cash. Plus the supermarkets are well-stocked and Drag Queen Story Hour isn't a thing. Last I checked, all my organs were also present and accounted for.

Peter Bossley said...

About 7 years ago I took 8K out of the bank to buy a used car. Other than needing to call ahead and see if they had enough cash on hand, nobody said anything about it. What we have been doing is cashing smaller checks that we get and keeping any cash we get and slowly building up our emergency cash fund. Once I get to 3 months of living expenses on that I'll quit adding to it and spend it on food storage, etc.

Hamsterman said...

Heck, the teller sent me to the manager to get *three* rolls of quarters, as the limit is currently two.

Unknown said...

I live just outside New Orleans,La and bank at Chase bank for the last 12 years.Some years ago I had some extra cash and wanted to put it in my checking account. It was about 200.00 dollars. The tellar asked to see my drivers license. I asked why I wasn't withdrawing but depositing to my on accoun t. She gave me its bank policy. After she got my license she then made a copy of it before returning it. I worked my wy up to the Manager asking why and kept getting bank policy and it was for my security. I guess Big Brother now wants to know if we are frugal and don't spend every penny?

Alex said...

Sold some big ticket items for a customer, and had the money for one item wire transferred to my (business) account, and the other via bank check (not a personal check). The customer wanted her money in cash, and I so notified the bank teller. Who then dutifully called the issuing bank to confirm funds and manually force the transfer. I expected to come back the next day, as per posted policy on availability of transferred funds. Instead, my account was locked for 30 days for "suspected money laundering." I was given a letter detailing such, which specified that my funds would be released after their "investigation" and would be available in full on day X. On day X, I returned and was told that I needed to come back X+1. I told the bank manager that I was going to step out of the lobby and call the county sheriff to report theft in excess of $70,000 on the part of the bank, and to return with an officer to watch someone being arrested. After ten minutes of observing the bank staff run around and wave their arms at each other, I left with my customer's money.

Pointing&Laughing said...

$5k per week, in mixed 50 and 100 bills, to go straight into the safe. Only once have I been asked what it's for, and I answered that I was going to do a Hunter Biden weekend. Teller almost spit out her teeth.

Robert said...

"a Hunter Biden weekend" Consider that stolen and oh, god, I wish I could have a weekend like that. :-)

Tried to buy an item on-line with my credit card. It was the third time in a year or two that I had bought the same item from the same company and the seventh item from them. My bank blocked the transaction as "suspected fraud". It was for $800. I guess I'm pleased they're looking out for me...barely pleased.

Landroll said...

Barter economy coming to a town near you probably sooner than we think. Regarding holding PM, what you going to do when the government says you cannot hold more than a tiny nominal bit of PM but must turn all overage into government at their fixed price? Excess subject to confiscation and felony charge? Seems US has already been down that path once.

markshere2 said...

Every pay period i pull 4 to 600 dollars from checking via the atm.

That seldom gets spent.

When all you have is 100 dollar bills, or ounces of gold, everything will cost a minimum of $100 or an oz of gold. 20s and 50s are good.

Currency should be kept in a fire resistant place.