Proof of Funds Letter: What It Is and How to Get One From Your Bank
A proof of funds letter is a document from your bank, credit union, or brokerage confirming how much money you have available in an account as of a specific date. It’s most often requested when you make a cash offer on a home, but sellers, lenders, and business partners may ask for one whenever they need to know you can pay before they commit.
What is a proof of funds letter?
It’s a short letter, usually on the institution’s letterhead and signed by an employee, that confirms your balance in one or more accounts. Unlike a bank statement, it doesn’t list transactions. It answers one question: does this person have the money right now?
Banks don’t all use the same name. If yours doesn’t recognize “proof of funds letter,” ask for a balance verification letter or an account verification letter. In some countries a similar document is called a bank certificate.
When you might need one
- Cash offers on a home. Sellers and their agents often want proof of funds before they’ll accept an all-cash offer, and some want it submitted with the offer.
- Down payment and closing costs. For a financed purchase, a seller may ask for a pre-approval letter from your lender plus proof that you have the down payment and closing costs.
- Auctions and investment property. Some auctions require proof of funds before you can register or bid.
- Business deals. Buying a business, investing in a private deal, or placing a large order may require showing that the money exists.
Requirements vary. Ask the person requesting proof of funds exactly what they’ll accept before you contact your bank.
What a proof of funds letter usually includes
- The bank’s name, address, and phone number, on official letterhead
- The date the letter was issued
- Your full name, matching the name on the account
- The account type, such as checking, savings, money market, or brokerage
- The account number, usually with only the last few digits shown
- The current or available balance
- The recipient’s name, if the letter must be addressed to someone
- The name, title, signature, and contact information of the bank employee who issued it
Recipients may contact the bank to confirm that a letter is genuine, so the contact details on it should lead to the bank, not to you.
How to get a proof of funds letter from your bank
- Ask what’s required. Find out whether a recent statement will do, whether the letter needs to be addressed to someone, and how recent it must be.
- Contact your bank. Visit a branch, call customer service, or send a secure message through online banking. Some banks handle these requests only at a branch or through a dedicated banker.
- Cover every account you’re counting on. If your money is spread across accounts or institutions, you may need a letter from each. Retirement accounts and investments may be treated differently from cash, so ask whether they count.
- Allow time and ask about fees. Some banks can issue a letter the same day, while others take a few business days. Some charge a fee.
- Check the letter. Names, amounts, and dates should be correct. If something is wrong, ask the bank for a corrected letter. Never change it yourself.
Proof of funds letter vs bank statement
| Proof of funds letter | Bank statement | |
|---|---|---|
| What it shows | Your balance on one date | All activity for a period, plus beginning and ending balances |
| Transaction details | None | Every deposit and withdrawal |
| Who prepares it | A bank employee, on request | The bank, automatically each period |
| How fast you get it | Same day to several business days | Instantly, from online banking |
| Privacy | Reveals little beyond the balance | Shows where your money comes from and goes |
| Cost | Some banks charge a fee | Usually free online |
Many sellers accept a recent bank statement as proof of funds. Mortgage lenders commonly ask for statements, often the last two months for each account, rather than a letter, because statements show how long the money has been there and where it came from. Requirements vary by lender. A letter is useful when you’d rather not share your transactions or when your balance has changed since your last statement.
How recent does a proof of funds letter need to be?
There’s no single rule. The seller, agent, or lender decides, so ask. Some want a document dated within the last few weeks, and a letter that’s several months old is unlikely to be accepted. If your deal takes longer than expected, be ready to provide an updated letter.
A letter shows only what you had on the day it was issued. Keep the money in place until closing. If a lender is involved, it may verify your funds again before closing.
Never fake a proof of funds letter
A fake or altered proof of funds letter is fraud, and so is editing a bank statement to show a higher balance. Recipients can verify letters with the bank directly, and getting caught can cost you the deal and lead to criminal charges.
Be wary of anyone offering to sell, “rent,” or “lease” proof of funds, or to produce a letter for a fee. Treat these offers as a red flag. If you don’t have the money yet, consider other options, such as getting pre-approved for a mortgage, making a smaller offer, or waiting until the funds are in your account.
Organize your statements for a purchase
Lenders, and sometimes sellers, may ask you to explain large or unusual deposits on your statements. A spreadsheet makes them easy to find. Our converter reads PDF statements and exports the transactions to Excel or CSV, so you can sort by amount and note where each large deposit came from.