Say you went to a bank without warning, just walked in off the street. Your account has sufficient funds to cover whatever you hoped to withdraw. What would be the maximum amount you could withdraw?
I would guess that it would depend on how much cash the bank keeps on hand and how much of a float they would want to retain to serve all customers. They wouldn’t want to come up short for further transactions after you leave with whatever you could. Maybe the better question would be, how much do banks keep in cash on hand and how fast they could replace outgoing cash from the Reserve Bank?
Could you walk out with as much as $1 million in cash?
Probably not. While the bank may be regulated by government controls as to a specific amount of cash they must have on hand on a daily basis, the bank itself may have a policy for its customers requiring them to notify the bank ahead of time if they wish to withdraw cash above a defined amount at any one time.
I don’t believe this is accurate Bosda. In referencing my previous post, assuming I have sufficient funds to cover, I can notify my bank according to their funds withdrawal policies that I wish to withdraw $1 million cash.
On the pre-selected day (and time), I can enter the bank, make the transaction and walk out with $1 million cash. However, because the withdrawal is above the $5,000 money laundering laws, I or the bank would be required to complete the government’s notification form.
This question is going to be hard to answer. There are lots of caveats. Your answer will depend on lots of factors, like where the bank is located, what day of the week it is, what kind of accounts you hold, and wether or not the bank in question is a member of the FDIC (I think just about every bank in the US is a member of the FDIC, though).
Having said that, here goes: lets’s assume the bank in question is a member of the FDIC (safe bet). Deposits in Deposit on Demand Accounts (DDAs) are liquid in the sense that you can walk in off the street and clear them out, just like that. Your standard checking accounts are all DDAs, but savings accounts and CDs are definitely not. Read the fine print on your account disclosure statement: banks have the right to require three business days advance notice in writing before you can withdraw these funds. Banks are reqired to keep a certain percentage of DDA funds on hand in cash to meet depositors withdrawal demands–this is one of the most important functions of the FDIC, after all. These measures are intended to allay consumer fears that their deposits are in jeopardy if the bank “runs out of money.” In theory, this should never happen.
So, in theory, you can walk in off the street and clear out your checking account.
Several points:
The FDIC insures each type of account to a maximum of $100,000. It would be unwise to actually have a million dollars in a personal account in any one bank. I don’t think it would be illegal, though, but of course any bank could refuse to do business with you if they wanted to. A customer who placed unreasonable demands upon a bank (“a million bucks in cash, please!”) would not be a customer for long.
2)Anyone trying to walk out of a bank with lots of cash will be STRONLY ADVISED not to. It’s dangerous, after all. At the bank where I used to work, we made customers sign release forms advising them against this practice. It’s smarter to take your money as a monetary instrument, like bank check, money order, travelers checks, etc.
3)This post is way too long. More to follow…
Others have mentioned earlier that the IRS requires that banks fill out paperwork for cash transactions involving over $10,000. This is correct, but is irrelevant to our discussion of how much money you can withdraw from the bank. The paperwork will be filled out, but this won’t stop you from withdrawing large sums of cash.
As a practical matter, banks can (but rarely) run out of cash on hand. What’s important here is that they run out of cash on hand–they’ve got lots of money tied up in accounts all over the world and at various branches, etc., as per FDIC regulations. Banks usually have several hundred thousand dollars in cash on hand, but the value varies wildly day by day and literally minute by minute. Banks don’t like to keep too much cash on hand for two big reasons: bank robberies, and, more importantly, money does more work for you when it’s invested in interest bearing accounts and investments, etc. Banks turn over excess cash to the Federal Reserve Bank in their district for deposit, as necessary, on business days. Of course, they can also withdraw money from the Fed when they need it. These turnovers in cash could easily be over $800,000 in cash of all denominations, depending on the bank. During the holidays, my bank used to fly through cash.
My head teller once accidentally set the time lock on our cash vault wrong. We were faced with the prospect of going the whole weekend with only the cash in the tellers’ vaults (WAY less than $100,000 cash). Two employees from the main branch drove several hundred thousand dollars in cash in a personal vehicle, and we managed without using the cash vault the whole weekend. We probably broke dozens of bank rules, and maybe an FDIC regulation, or two, but we managed.
I went off on a tangent there. To sum up: yeah, you can probably walk out of a bank with a whole lotta cash.
I’m guessing that if you had a million dollars in a bank to withdraw, they’d happily meet some unreasonable demands to keep your business. My wife’s grandfather (aka Pa) one time withdrew all the money (I don’t know how much, but a lot) from his business account because a teller had been rude to him. When the bank manager was informed he was closing the account, he ran out and asked Pa if there was anything he could do to keep his business. Pa pointed to the teller, said “Fire him.” The teller was gone that day. True, he may have been transferred to another branch, but the manager was perfectly willing to go to the effort of making sure Pa never saw that teller again to keep his business.
I got some static over trying to get out $5000 in cash first thing in the morning. (For a car down-payment and a rent deposit) They did have it but wouldn’t guarantee they could give it to me until they actually counted it up. And they also bitched that I should have called ahead.
You would get a very quick call from a very interested IRS agent.
Actually, what you propose is pretty much impossible. The main vault in a bank is generally a large-ish room. Think large walk in closet for an idea of a small vault. Many rival the size of an average master bedroom, while some take up the whole bottom floor of the building. The smallest cash vaults I have seen at a bank were in branches located inside a supermarket. Even those afforded about 25 cubic feet of storage space. Roughly 8 “bricks” of used bills (10 straps of 100 bills each) fit in a cubic foot. So even in the tiniest vault you are talking about 200,000 bills. In addition to the main cash vault there are usually other places to lock up cash. Each teller station usually has a storage safe that would easily hold 100,000 strapped bills. Each supermarket branch had at least 3 teller stations, so now we’re up to 500,000 bills and not even sweating yet. There are other places that cash can be stored on a temporary basis.
In a nutshell, you’d basically have to take an armored truck full of ones to a teeeny, tiny branch to even have a chance at overfilling their secure storage. And even if you did they’d just direct you to a larger branch.