Proof of source of funds
What is proof of source of funds?
When you hear providers talking about 'proof of source of funds', they're asking for paperwork that makes it clear where a specific payment or deposit got its money from. This isn't just their policy, it's required under anti-money laundering rules, aimed at showing your money comes from a legitimate place before it moves through their systems.
There are several reasons you might get this request. Sometimes it's triggered by an unusually large payment, sudden changes in how you use the service, or a transfer connected with countries seen as higher risk. The most common trigger is a large transaction, which we cover in our article on whether banks report large transfers. For most people this is a routine check, nothing more, and it doesn't mean you've done anything wrong.
Source of funds versus source of wealth
You'll sometimes get asked about two related but different things. When a provider says 'source of funds', it means they want to know where this particular sum came from, that could be a payslip, a car sale, or a work bonus. When they ask about 'source of wealth', they're interested in how you've built your assets over the years, perhaps through a business, a series of jobs, or receiving an inheritance.
Most regular transfers only need a source of funds check. Source of wealth checks crop up with higher-risk customers and often call for a broader set of records, sometimes from several years back.
Documents that are usually accepted
The documents you'll need can vary with the provider and the payment details. But here are the kinds of evidence that often fit:
- Payslips or an employment contract, along with bank statements that show your salary coming in.
- A signed contract of sale for something like a house, car, or another asset.
- Statements from an investment, exchange, or crypto platform that confirm earlier sales or withdrawals.
- Papers on an inheritance, a will or an estate confirmation, for example.
- Business accounts or dividend statements if you own your own company or are self-employed.
Copies need to be clear and complete, with your name matching what's shown on the account. Add a note if the connection isn't obvious, say which payment the papers refer to, mention the amount and when it came in. Only send what the provider asks for, and never share passwords or your login codes with anyone.
Frequently asked questions
Is a bank statement enough as proof of source of funds?
Sometimes it is, especially if the statement clearly points to the original source of the money, like a series of salary payments. If what you send only shows a big deposit with no background, the provider will usually come back asking for extra details, for example, a sale contract that explains the deposit.
What happens if I cannot provide proof of source of funds?
If you cannot provide proof, the provider can delay, block, or even reject the payment, and it's allowed to put limits on or close your account. You might not get a full explanation, since anti-money laundering law keeps some details confidential. If you're struggling to provide the documents, ask the provider what else it might accept and what will happen to your funds during the review. More on that is in our article about why an account is frozen.