Cash deposit source-of-funds checks: prepare evidence
A bank asking where cash came from is usually trying to understand whether the deposit fits what it knows about you or your business. “Source of funds” means the activity that generated the money - for example salary saved as cash, sale proceeds, business takings, an inheritance or a gift - not simply the fact that you carried notes to a branch.
Answer the bank’s question with a clear explanation and evidence that matches the story: sale receipt, invoice records, tax or accounts information, probate papers, gift correspondence or withdrawal records where relevant. There is no single UK cash amount that automatically proves wrongdoing, and banks can apply their own risk-based limits and checks. Keep the deposit receipt and do not split cash into smaller deposits just to avoid questions.
“Source of funds” is about how the money was generated
The FCA distinguishes source of funds from the route the money took. Saying ‘the cash came from my safe’ explains where the notes were stored, not how you obtained them. A better answer is ‘these are six weeks of café takings’ or ‘this is £7,500 from selling my car’.
For a business, the bank may compare the deposit with expected turnover and sector. A £9,000 weekend cash deposit can be ordinary for a busy restaurant and unusual for a one-person software consultancy. Context is part of the control.
Start with a dated baseline. Describe the economic activity that created the cash, not merely the fact that it was deposited. Salary saved at home, business takings, sale proceeds, inheritance, a gift and repayment of a private debt all need different supporting evidence and a different explanation of why cash was involved. Keep a screenshot, statement or provider message for the figures that matter.
Prepare evidence that fits the explanation
For business takings, daily till reports, invoices, accounts and VAT records can help. For a private sale, keep the advert, sale agreement, buyer messages and evidence of ownership. For an inheritance, probate or executor documentation may be relevant. The bank decides what it needs in the specific case.
Do not manufacture paperwork after the fact. If you genuinely lack a formal document - for example cash savings built over years - explain the history honestly and provide whatever consistent records exist. Inconsistent invented evidence creates a bigger problem than an imperfect paper trail.
Worked example: for £7,500 from selling personal equipment, a sale agreement, buyer correspondence and evidence of ownership may fit the story. For repeated weekly business cash, sales records, till reports and accounts are more useful than one handwritten statement saying the money is legitimate.
Cash deposit limits and source checks are separate issues
The FCA has worked with banks and the Post Office to strengthen controls around cash deposits while preserving legitimate access. Banks can set account or channel limits and can also ask questions below those limits. Staying under a published daily cap does not mean the transaction is exempt from financial-crime checks.
Equally, a large cash deposit is not automatically suspicious. The FCA explicitly says controls should be proportionate and legitimate customers, including cash-heavy businesses, should still have workable deposit routes.
Use a fixed sequence. prepare a short chronology with amount, date, source and supporting document, and send it through the bank’s requested channel. If the bank asks again, compare the new question with the old one before resending everything; it may be asking about a different transaction or a gap in the chain. After each step, note what changed and what did not.
Do not split deposits to make the questions disappear
If you have £12,000 of legitimate cash and the bank asks for evidence, depositing £1,900 repeatedly to stay below a perceived threshold can make the pattern harder to explain. Use the channel the bank approves and ask whether a tailored business cash limit or appointment is available.
For a business, regular predictable deposits are often easier to reconcile than sporadic large amounts. Keep internal records showing the trading days or events that produced the cash.
Timing can change the practical outcome. cash-deposit limits and compliance checks are separate. A deposit can be within the bank’s operational limit and still trigger questions, while a legitimate source does not create a right to bypass branch, Post Office or account limits. Build a buffer around any bill date, completion, trip or tax-year deadline.
For cash deposit source-of-funds checks, cross-check the expected result against the actual result in 'Do not split deposits to make the questions disappear'.
If the account is restricted, ask what practical information the bank can give
A source-of-funds review can sometimes coincide with a payment block or account restriction. The Financial Ombudsman recognises that banks can freeze accounts while investigating suspected fraud or money laundering and may not be able to disclose every detail during the review.
You can still ask what documents are outstanding, whether essential payments can be made, how incoming salary or benefits will be handled and what channel should be used for further evidence. Keep a dated record of everything supplied.
If the normal route fails, move from retrying to evidence. do not split one transaction into smaller deposits merely to avoid questions, because the pattern itself can create more concern. If access is restricted, ask what documents or practical information the bank can request or disclose and keep a dated record of every submission.
A complaint should focus on proportionality and handling, not the existence of checks alone
If you believe the bank lost documents, ignored clear evidence or left the account restricted without reasonable communication, make a formal complaint describing the timeline and impact. Separate the legitimacy of the bank performing checks from whether it handled your particular case fairly.
Include direct losses you can prove - for example a £25 late fee caused by a blocked payment - and the steps you took to cooperate. That gives the bank and, if necessary, the Ombudsman a concrete record to assess.
Use one closing decision rule. if you complain, focus on proportionality, delay, lost documents or poor communication rather than the mere fact that a regulated bank asked about cash. Keep the evidence pack after the deposit is accepted in case a later review asks about the same source. Recheck the live account terms or tariff on the day you act.
Sources and verification
- FCA - cash-based money laundering and cash deposit controls
- FCA Handbook - source of funds and source of wealth
- Financial Ombudsman Service - frozen accounts and blocked payments
Omar Khan
The best source-of-funds answer is short and documentary: what generated the money, over what period, and which records support it. I would not try to “manage the threshold”. I would make the legitimate transaction easy for the bank to understand.
MyBankAnswers uses official provider and UK regulatory sources wherever practical. Information is general and does not constitute financial advice.