People make excuses for withdrawing cash for many reasons, from protecting their privacy to hiding their spending.
When you are visiting a bank to make a withdrawal, the teller may ask why you need the cash you are withdrawing. They need to ask these questions so that they can try to detect signs of money laundering or criminal activity.
If you are withdrawing more than $10,000 from a bank, the bank is required by law to ask how you plan to use the money so they can report that information to the IRS. In these cases, it is best to be truthful with the teller.
In other cases, you may be questioned about your withdrawals by someone you share a joint bank account with. They may see cash withdrawals on a bank statement, and wonder what the money was used for.
No matter why you need to explain yourself, here are five common excuses for withdrawing cash.
1.) Giving a Gift
When you give a cash gift to someone, you can give them any amount. Saying you are withdrawing cash to use as a gift is more believable when the amount is more modest, in the hundreds of dollars and below.
It’s less common, but you can give also cash gifts in the thousands to someone, such as for a wedding gift or graduation present.
2.) Preparing for Emergencies
Financial advisors recommend that you have three to six months of living expenses saved in an emergency fund. The more cash you have on hand, the better prepared you are to face unexpected situations like paying doctors bills or
Emergency funds are often held in savings accounts so that they received FDIC protections. Some people prefer having their emergency funds in cash in a safe place in their homes.
3.) Repaying Someone
You might borrow money from someone for any number of reasons. The amount you can potentially borrow from another person can range widely, from just a few dollars to thousands.
So, saying you are withdrawing cash to repay what you owe another person can be an effective excuse for withdrawing cash. Be prepared to possibly explain why you borrowed the money from the other person in the first place.
4.) Planning to Travel
Many people planning to travel withdraw a large amount of cash beforehand. Travelers, especially to foreign countries, usually carry more cash than usual so they can pay with things if their credit card is not accepted.
Travelers like to have cash because it provides some security when they are going places where they aren’t familiar with the payment practices. Having cash also gives travelers some peace of mind that they can meet their needs in case of an emergency, like if their credit card is lost or stolen.
5.) Paying for Auto Repairs
Some auto repair shops give steep discounts for customers paying in cash. That’s because if a customer uses a credit card, the auto repair shop must pay merchant fees to the credit card company.
Auto repairs can often be expensive. One repair may cost thousands of dollars. So, if you need to make a large cash withdrawal, using it to pay to maintain your transportation can be a reasonable excuse.
Keep in mind that auto repair shops do provide receipts and keep records. So, if you are using this as your reason for making a withdrawal, you may be asked to prove it.
Other Excuses for Withdrawing Cash
Paying online and through apps like Venmo and PayPal is increasingly common, but not everyone accepts payment that way.
You might need cash for countless other reasons, like making a major purchase from an individual. For example, if you found furniture or antiques listed online, you may need cash to pay for it.
Or you might need cash to contribute toward a group gift or to tip a professional, like a mover or server at a restaurant.