By: Money Navigator Research Team
Last Reviewed: 21/01/2026
FACT CHECKED
Quick Summary
Cash deposits are inherently harder for banks to evidence and trace than electronic payments, so they tend to attract more monitoring questions – especially when deposit patterns don’t clearly match the stated business model, seasonality, or expected margins.
Most “cash deposit reviews” focus on:
- where the cash comes from
- How it is generated
- How it is recorded
- Whether the deposit activity makes sense for the business profile the bank holds.
Outcomes vary: some reviews end with a request for clarifying documents, while others can lead to restrictions on certain activity (including cash deposits) if the bank can’t get comfortable that the risk is understood and controlled.
This article is educational and not financial advice.
Why banks treat cash deposits differently to card or bank transfer income
Cash is more “information-light”
With a card payment or bank transfer, there is usually a digital trail (payer details, merchant data, reference fields, settlement records). Cash can be legitimate trading income, but it can also be difficult to link to a specific customer or invoice without strong internal records.
That’s why UK AML frameworks emphasise risk-based controls and enhanced measures where risk is higher. For background on the risk-based approach used internationally in banking supervision, see the FATF risk-based approach guidance for the banking sector.
Banks are expected to operate systems and controls to manage financial crime risk
UK banks are expected to run monitoring that can identify unusual activity and to have governance around financial crime risks. The FCA periodically updates its expectations and guidance materials for firms, including via updates to its Financial Crime Guide (see the FCA’s PS24/17: Financial Crime Guide updates).
Cash activity is often assessed in context, not in isolation
One-off deposits are not automatically “bad”. Reviews more often trigger when the bank sees patterns that are hard to reconcile with what it understands about the business.
Examples of context a bank may consider:
Stated business type and expected payment mix (cash vs card vs invoice)
Typical customer profile and trading channel (in-person vs online)
Seasonality and location (events, tourism peaks, market days)
Margin logic (cash deposits that don’t align with plausible sales volumes)
If your payment activity profile doesn’t match the category or narrative on file, banks can ask questions for the same reason they query other mismatches (see: business model mismatch and MCC flags).
What usually triggers a “cash deposit review”
A cash review is often initiated by transaction monitoring alerts or a periodic refresh. Common triggers include:
1) Deposit frequency or size changes
A sharp rise in deposit volumes vs prior months
Frequent deposits that don’t match typical trading patterns
A sudden change in deposit location behaviour (e.g., many deposits far from the trading area)
2) Deposits that don’t match the stated trading model
For example, a business described as “online services” suddenly presenting regular cash deposits can create a documentation gap that the bank wants to close.
3) Third-party deposit behaviour
Some banks treat deposits made by people not clearly connected to the business as higher-friction – because it can be harder to evidence the underlying commercial reason and cash provenance.
4) Recordkeeping signals that don’t “join up”
Banks may compare what they see in deposits against:
The stated turnover range
Transaction descriptions
Merchant settlement levels (if any)
Previously supplied management accounts or onboarding information (where relevant)
5) Wider enhanced due diligence (EDD) triggers
Sometimes cash deposits are not the only factor; they coincide with other risk signals (ownership/structure, geography, product/service risk), which can push the account into enhanced review. For a wider view of how EDD is triggered and what it can lead to, see: enhanced due diligence (EDD) for SMEs.
Summary Table
| Scenario | Outcome | Practical impact |
|---|---|---|
| Regular cash deposits increase quickly vs prior months | Bank asks for explanation and supporting records | Time spent gathering evidence; potential temporary friction on deposits |
| Cash deposits don’t fit the business description on file | Bank requests clarification of trading model and payment mix | Business may need to demonstrate how cash is generated and recorded |
| Deposits are made by third parties | Bank queries depositor relationship and rationale | Some deposits may be delayed or rejected depending on bank policy |
| Deposit locations shift (many branches/areas) | Bank checks operational footprint and consistency | More questions about where trading occurs and who handles cash |
| Incomplete or inconsistent narratives | Review may escalate to enhanced checks | Longer review timeline; higher chance of restrictions |
What banks typically ask for (and what the review is trying to prove)
Banks generally aren’t trying to “audit” a business in the HMRC sense. They’re trying to answer a narrower set of AML questions:
A) Where does the cash come from (source of funds)?
This is about the immediate origin of the money being deposited (e.g., daily takings from in-person sales). Banks often use “source of funds” and “source of wealth” differently; the distinction matters when a review escalates. See: source of funds vs source of wealth.
B) How is the cash generated and recorded?
Reviews commonly focus on the cash-handling chain:
How sales are recorded (EPOS summaries, till “Z” reads, job sheets, receipts, booking logs)
How refunds/voids are handled
Who counts cash and how discrepancies are recorded
How cash is stored and transported
C) Does the deposit pattern make commercial sense?
Banks may sanity-check:
Frequency of deposits vs opening hours/footfall
Cash vs card mix in the sector
Whether deposits align with plausible revenues after costs
D) Is the business providing information promptly and consistently?
“Review risk” often increases when answers are delayed, incomplete, or contradictory across documents.
For a broader list of the kinds of documents banks request during closures/restrictions (many overlap with cash reviews), see: documents banks ask for when considering account closure.
Why banks sometimes won’t tell you exactly what triggered the review
Banks may give high-level reasons (“routine review”, “we need more information”), but they may avoid specifics if doing so could prejudice controls or create legal risk.
UK guidance on suspicious activity reporting and “tipping off” offences explains why regulated firms can be constrained in what they say once suspicion/reporting considerations exist.
See HMRC’s overview of SARs in the Economic Crime Supervision Handbook (ECSH155000) and a plain-language explainer of tipping off in the Law Society note on tipping off and prejudicing an investigation.
This doesn’t mean a SAR has been filed in any given case. It means banks sometimes communicate cautiously because of the rules around suspicion, reporting, and investigation risk.
Scenario Table
| Scenario-level | Process-level | Outcome-level |
|---|---|---|
| Cash-heavy trading model | Bank compares deposits to stated profile, sector expectations, and prior activity | “Information request” stage, often resolved with clear records |
| Cash deposits + other risk signals (ownership/sector/geography) | Review escalates to enhanced checks and deeper evidence gathering | Restrictions on certain activity (sometimes including cash deposits) may be applied while checks complete |
| Deposit activity inconsistent or poorly evidenced | Bank assesses whether it can manage risk within its policies | Bank may limit services or end the relationship if risk cannot be mitigated within policy |
Compare Business Bank Accounts
Cash deposit support is not uniform across UK business accounts. Some providers are designed primarily for digital receipts and may offer limited cash deposit options, while others support cash deposits through branch networks or partner arrangements. That difference can materially affect operational friction for cash-heavy firms – independently of fees, app features, or lending add-ons.
If you want a neutral feature comparison across providers (including practical banking features beyond cash), see our comparison of UK business bank accounts.
Frequently Asked Questions
Banks generally use “cash-intensive” to mean a business where a meaningful share of turnover is received in notes/coins rather than electronically. This is common in parts of hospitality, personal services, markets, some trades, and event-based selling – especially where small ticket sizes or tips are involved.
“Cash-intensive” is not a verdict on legitimacy. It is a descriptor that can increase the evidencing burden because cash is harder to link to individual customers without strong internal records and consistent narratives.
No. Many legitimate businesses deposit cash routinely. The practical difference is that banks often need more contextual information to feel comfortable that deposits reflect normal trading and that the account profile is accurate.
Risk tends to be assessed dynamically – changes in pattern, inconsistencies, or weak recordkeeping can matter more than the mere presence of cash deposits.
Banks commonly look for records that connect cash deposits to trading activity: EPOS/till summaries, daily takings logs, job sheets, invoices/receipts, booking schedules, and (where relevant) management accounts showing cash sales.
The aim is typically consistency: a clear story that links “cash generated” > “cash recorded” > “cash deposited” without gaps. That framing also aligns with how “source of funds” is understood in reviews (see: source of funds vs source of wealth).
If deposits are made by multiple people, the bank may ask about roles and relationships because third-party deposits can be harder to attribute to the business’s own trading activity. The question is often operational: who handles cash, and how is it controlled?
In some business models (multi-site retail, franchises, events teams), multiple depositors can be normal. Reviews typically focus on whether that structure is documented and consistent with the business profile on file.
Some banks may limit cash deposit services as a policy matter, or restrict deposits temporarily during a review. Even where cash deposits are supported, banks can apply controls if activity falls outside their risk appetite or if evidencing is incomplete.
Limits and service availability vary by provider and channel. That’s one reason cash deposit support is often a distinct feature to compare when looking across accounts (see: comparison of UK business bank accounts).
“Under review” usually means the bank has opened a case to reconcile account activity with AML controls and its understanding of the business. This may involve questions, document requests, or temporary restrictions while the bank assesses what it needs to know.
For the broader mechanics of restrictions and what reviews can look like (beyond cash), see: bank compliance reviews explained. Cash deposits are a common trigger category within that wider framework.
There is no single standard timeline. Duration depends on how complex the activity is, whether enhanced checks apply, and whether the requested information is sufficient to close the evidencing gap.
Longer reviews are more common when multiple risk factors overlap (ownership changes, sector sensitivity, unusual transaction flows), or when the bank needs to reconcile inconsistent information across documents – often the point at which enhanced due diligence comes into play (see: EDD triggers, checks, and outcomes).
Not necessarily. A bank review is usually the bank’s internal compliance process. Banks can have legal reporting obligations in certain circumstances, but that does not mean HMRC is automatically notified in routine reviews.
HMRC’s materials on suspicious activity reporting explain how SARs work and why regulated firms handle suspicion and reporting carefully (see: ECSH155000 – SARs overview). That said, most account reviews are framed around reconciling activity with the account profile and evidence, not around tax enforcement.
FSCS cover depends on the type of institution and the product structure (for example, bank deposits versus other arrangements). A review or restriction is a separate concept from deposit protection arrangements.
For an educational walkthrough of how FSCS cover can apply to business account balances, see: FSCS cover for business bank account balances.
If an account is closed, practical issues can include where incoming payments go and when any remaining balance is returned. The exact mechanics vary by bank and payment type.
Two common operational questions are addressed in these guides: incoming payments when a business account is closed and how long banks return the remaining balance after closure.
Cash deposits are rarely “the problem” on their own. The hidden mechanism is evidencing density: electronic payments often arrive with embedded identifiers, while cash relies on the business to provide the missing join between trading reality and bank-visible transactions.
When that join is weak – because the business profile is generic, records don’t reconcile cleanly, or deposit patterns change – monitoring systems and reviewers are more likely to escalate.
In practice, the most disruptive outcomes occur when the bank cannot reduce uncertainty to a level that fits its policy and risk appetite.
That is why cash-heavy firms can experience higher friction even when trading is legitimate: the review is often about whether the bank can demonstrate comfort with the activity, not whether the business can assert it.
Sources & References