What Would You Do with Millions in Cash?

Most people will never face the problem of safely storing millions of dollars in cash. While it sounds like a dream scenario, managing and securing such a large sum of money can be surprisingly complicated.

Storing Cash: The Basics

If you need the cash soon, say for a big construction project, it must stay liquid and accessible. Theoretically, $10 million in $100 bills could fit under a mattress, but it wouldn’t be comfortable. That amount of cash would take up about four cubic feet of space, roughly the size of a large suitcase, and weigh around 220 pounds. You’d need a sturdy bed frame to handle that kind of weight!

However, storing such a large sum of physical cash is impractical and highly unlikely. Gathering $10 million in cash would require coordination with multiple banks, possibly the Federal Reserve. Moreover, you’d have to complete a lot of paperwork to prove you’re not involved in money laundering. And once you obtain the cash, transporting it securely would become another challenge.

Depositing Cash in a Bank

A more practical solution might be to deposit the cash in a bank. However, this comes with its own set of problems. The Federal Deposit Insurance Corporation (FDIC) only insures individual accounts up to $250,000 and joint accounts up to $500,000. To fully insure $10 million, you must spread it across 40 different accounts at 40 or 20 banks if you use joint accounts.

But beware, there will be paperwork involved. Cash transactions over $10,000 must be reported to the government, and if a bank thinks your transaction looks suspicious, it is required to file a Suspicious Activity Report (SAR). Banks will also need to verify the source of the funds, so be ready to provide documentation proving the money is legitimate.

Choosing the Right Bank

Assuming you overcome these obstacles, the next step is choosing the right banks to store your millions. Financial expert Dave Ramsey advises against new banks or megabanks for this purpose. Instead, he suggests selecting a few strong regional banks with solid financials. FDIC insurance might not be as critical if a bank is well-capitalized and has a good reputation. However, even if a bank looks safe, keeping your deposits below the FDIC insurance limits is an excellent idea to protect against unforeseen financial troubles.

Other Options for Storing Millions

If you don’t need the cash immediately, there are other ways to store and invest large sums of money. High-net-worth individuals often look into diversified investment portfolios, which could include stocks, bonds, real estate, and other assets. These options provide potential growth while offering better security and liquidity management than physical cash.

Some may also consider placing their money in money market funds, which are relatively low-risk and offer easy access to your cash. Another alternative is working with a financial advisor to set up trust accounts or invest in municipal bonds, which could provide tax advantages and steady returns.

Security and Strategy Are Key

Having millions in cash is both a luxury and a logistical challenge. Whether you keep it under a mattress, deposit it in a bank, or invest it elsewhere, the key is to ensure your money is safe, secure, and working for you. By understanding your options, choosing reputable banks, and diversifying your holdings, you can make the most of your windfall while sleeping soundly at night—no extra-sturdy mattress required.