What Is "Source of Funds"
Source of funds is documentary confirmation of where the money you are transferring came from. A bank or payment system requests this information as part of its KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures.
It is important to distinguish between two similar concepts:
- Source of funds — where the specific money for this transfer came from (salary, asset sale, loan).
- Source of wealth — how you accumulated your overall wealth (entrepreneurship, inheritance, investments).
Why Banks Request This Information
AML legislation requires financial institutions to verify the origin of large or suspicious payments. A request may be triggered by:
- Your first large international transfer from this account
- An amount exceeding a set threshold (usually €10,000–€15,000)
- A transfer to a high-risk jurisdiction
- A mismatch between your customer profile and the transfer amount
Documents Banks Accept
| Source of Funds | Suitable Documents |
|---|---|
| Salary | Pay slips, employment contract, bank statement |
| Business income | Tax return, business bank statement |
| Property sale | Sale and purchase agreement |
| Securities sale | Brokerage account statement |
| Inheritance | Grant of probate / inheritance certificate |
| Loan or credit | Loan agreement |
| Cryptocurrency | Transaction history + exchange report |
Step-by-Step: Responding to the Bank
- Identify the exact source — did the money come from your salary account? From an asset sale? This will be the basis of your response.
- Select documents from the table above. Make sure the documents confirm the amount of the transfer specifically, not just your general wealth.
- Write a cover letter — 2–3 paragraphs explaining: who you are, where the money came from, and the purpose of the transfer. The more specific, the better.
- Check the language requirements — some banks only accept documents in the bank's country language or in English. Certified translations may be required.
- Submit on time — typically within 5–10 business days. Call your account manager to confirm receipt.
Frequently Asked Questions
Am I required to respond to a source of funds request?
Yes. If you do not provide the information, the bank is entitled to refuse the transaction and in extreme cases to close your account.
What if the money comes from cryptocurrency and I do not have full documentation?
Provide whatever you have: transaction history from the exchange, wallet screenshots, a description of your activity. Banks are increasingly accepting crypto sources when a reasonable documentary trail exists.
Can I give a verbal answer instead of documents?
No. Compliance requires written confirmation with supporting documents. A verbal explanation is not sufficient.
Marix helps clients prepare the right documentation to pass compliance reviews for international payments.