Where do large corporations store their massive amounts of cash?
You can find out the general types of investments by reading the public corporation 10-Q report that is filed with the SEC it can be accessed via the EDGAR system. It will not tell you what securities they have, but it does identify the short term and long term investments categories and their value. Short term investments, treasuries, current accounts. They are using several banks, hedge funds or other financial institutions, in order to diversify the risk inherent to the fact that the firm holding (a fraction of) their cash, can be insolvent which would makes them incur a really big loss. Also, the most available form of cash is very often reinvested everyday in overnight*products and any other highly liquid products, so that it can be available quickly if needed. Since they are aware that they are not likely to need all of their cash in one day, they also use longer terms or less liquid investments (bonds, stocks, etc..). For tax optimization, cash is stored mostly overseas, according to the New York Times. For Apple, everytime a song or an app is bought in Europe, Africa or Middle East, money flows to iTunes Sàrl, in Luxemburg. Royalties on patents flow internally from Apple in California to Apple in Ireland. Then profits flow to the Carribean. The problem is that cash cannot be brought back to the USA without huge taxes.
"I believe that an understanding of the taxation system can help to understand our place in it, and how that impacts each of our personal finances. I will try to remain unbiased here but this is a somewhat subjective question, so please bear with me if you disagree on any point. Some of these tax savings are well-advertised, and can be used by many people, such as tax credits for mass-transit passes which exists in some countries. But some of these tax savings are things you never heard of before, until it winds up on the news. Why do some people seem to get tax savings that you and I cannot get, and why do those people always seem to have so much more money than us? A simplistic answer can show this in three parts: (1) The source of one's income; (2) Transaction costs; and (3) ""tax loopholes"". Tax savings occur proportionately to one's income, and if the savings apply to investment income, they occur proportionately to one's wealth. If someone living paycheck to paycheck with a minimal amount in a bank account ""saves tax on investment income"", they might reduce their taxable interest from $50 to $0. That's because they simply don't have any other investment income to reduce. All of their income comes in the form of employment, which is typically very hard to save taxes on. Most governments have a very firm grasp on the taxation of employment income, because it is a huge proportion of income in the country (and therefore has the largest amount of tax associated), and because it is very straightforward (work for someone = employment income). A more cynical person than I might point out that investment income is earned by the very wealthy, who can afford to lobby for politicians to pass favourable investment income laws. Even very straightforward tax saving opportunities may cost money to enable. The simplest example would be: if a tax saving opportunity is so complicated that an average person can't understand it themselves, then an accountant, lawyer, or banker will need to be the one to explain it. And that can cost you money. If your tax isn't so much to begin with, then the transaction costs to achieve the tax savings could be higher than the tax savings themselves. For example, most countries have tax savings / deferrals if you start a corporation. These rules typically exist to promote investment in the local economy. But someone who earns $10k in a side-business might not be able to afford the $3k in incorporation costs just to save $2k in taxes. The more income and wealth you have, the more these transaction costs become worthwhile. I'm going to generally define ""tax loopholes"" for the purposes of this answer as something where a somewhat arbitrary situation allows for taxes that a layman would consider unfair or unexpected. This often occurs with good intentions but poor legislation - the government tries to provide a benefit to a deserving group or to promote an activity, but ends up allowing another group to take advantage.  For example in Canada, there existed until a few years ago tax saving rules about passing on wealth to children at lower tax rates, only when a close family member is near-death [setting up a 'testamentary trust' between a grandparent and a grandchild could in some circumstances allow that trust to be created with additional 'tax brackets', meaning more income would be taxed at a less-than top tax rate before being distributed to the grandchildren].  The rules were put in place with the idea that ""oh gee, a family member has died, and the dang ol' family is grieving so hard they can't distribute the wealth to the next generation for a few months on account of all the crying. We should make it so that the estate is taxed like a person, and if they earn only a little income, they have a low tax rate, and they only get taxed at the full rate if they have a lot of income"". Seems reasonable enough, but if a family is ready to pass on wealth at the same time as someone is nudging the bucket with their foot, a morbid discussion with your lawyer and accountant could set your children up for life with forever reduced taxes on massive inheritances.  In the case of the Panama / Paradise leaks, tax savings are due to all 3 of the above: Those who have massive wealth (and therefore earn the majority of their income from investments instead of employment) can afford the transaction costs associated with taking advantage of specific ""tax loopholes"". The simplest example of which is just that income earned in a foreign country might have a lower tax rate than income earned domestically. This is often a result of ""cracks"" in the foreign tax treaties between countries, which exist generally to promote business between countries and prevent double-taxing individuals who need activity in both countries for whatever reason. Take for example the ""Apple loophole"". Apple has operations around the world. Some activity occurs in low-tax jurisdictions. Apple reports a high percentage of the value of R&D as being associated with those jurisdictions. Those branches in low-tax jurisdictions charge the high-tax branches (such as the US) with fees for use of their valuable research. So much of Apple's income is reported in those foreign jurisdictions. It won't be taxed in the US until Apple ""repatriates"" the cash back to the US. Until then, the cash sits in the foreign jurisdiction, accruing less tax. This and similar rules can be used by individuals wealthy enough to hold corporations in foreign jurisdictions with low tax rates. How each particular rule / ""loophole"" works will depend on the nature of a specific case - tax law is complex, and the rules between countries are even more so. These foreign tax loopholes are closing every year. It is getting harder and harder to hide money offshore, and it is getting less and less likely that you will be able to find a country with juuuust the right loopholes for your own offshore wealth. These types of news leaks will only help to expedite those changes." Brokerage firms are required to report the number of shares being shorted.  This information is reported to the exchange (NYSE of NASDAQ) and is made public.  Most financial sites indicate the number of shares being shorted for a particular stock.  The image below from Yahoo finance shows 3.29 million shares of CMG were being shorted at the close of 9-28-2012.  This is over 12% of the total outstanding shares of CMG.  For naked short selling additional information is tracked.  If the brokerage is unable to borrow shares to deliver before the settlement date of a short sale then the transaction is recorded as fails-to-deliver.  No money or shares are exchanged since the brokerage is unable to deliver the shares that were agreed upon.  A large amount of fails-to-deliver transactions for a stock usually indicates an excessive amount of naked shorting.  When investors and brokerage firms start to aggressively short a stock they will do so without having borrowed the shares to sell.  This will result in a large amount of naked short selling.  When there are a large number of naked short sellers not all the sellers will be able to borrow the necessary shares before the settlement date and many fails-to-deliver transactions will be recorded. The SEC records the number of fails-to-deliver transactions. The table below summarizes the fails-to-deliver transactions from 1-1-2012 through 9-14-2012 (data obtained from here). The “Ext Amount” column shows the total dollar value of the transactions that failed ( i.e. Fail Qty * Share price ).  The “Volume” column is the total number of shares traded in the same time period.  The “% Volume” shows the percentage of shares that failed to deliver as a percentage of the total market volume. The table orders the data in descending order by the quantity of shares that were not delivered.  Most of the companies at the top of the list no longer exist.  For many of these companies, the quantity of shares that failed to deliver where many multiples of the number of shares traded during the same time period.  This indicates massive naked short selling as many brokerages where unable to find shares to borrow before the settlement date. More information here. It would seem that the best method of bank robbery involves an inside man or woman, someone in the bank who can provide information about where the largest amount of cash is and when to hit the bank. $20,000 does not seem to be worth the risk of jail time. I'd say anything south of $100,000 per bank robber probably wouldn't be worth it, and getting that amount of cash would require more than a simple walk-in, pull a gun, empty a register robbery.   The trick would either be proving an iron-clad alibi for the inside person or the group of robbers collectively contributing to the cost of that person disappearing. At the very least, that individual should get the largest share of the score.   Escape is undoubtedly the biggest issue. One would need immediate transportation from the scene of the crime which could leave the area, then be dumped (fully scrubbed for prints, DNA, etc.) then the group would all go their separate ways.   Regardless, I don't think it's worth the risk or the effort. First off, when you rob a bank the greedy bankers doesn't lose the money, it's paid by the FDIC, which is founded by taxpayers, so what you're doing is taking money that might otherwise be spent on social services for people who need them. Moreover, it's expensive and time-consuming to launder large amounts of money. If you manage to get $120,000 out of a robbery, which is hugely optimistic, that number would take years and a significant fraction of the take just to clean for personal use. And the risk of not only prison but possibly death seems rather extreme when compared to the admittedly more dull alternative of finding and holding down career.   I think there are probably more efficient criminal methods of obtaining large quantities of money/wealth, too. Illegal narcotics, for example, are a $300 billion a year industry. While it's not the easiest business to get into, one imagines, the potential for someone who isn't just some moron off the street to climb the cartel ladder could be significant and could lead to a high income. There are significant risks, of course, and there's a serious moral question as to whether selling illegal drugs is acceptable or not, but if you're morally flexible or have the opinion that illegal narcotics are not something that should be prohibited, it could work.   And there's always money in the banana stand. "So some background here - when corporations, large ones have to deal with tax, they generally try to avoid as much tax as possible. Since there are places that are ""tax havens"" where there is less to even no tax on profit, a lot of money gets routed there to avoid taxes in other places (US or other unfavorable countries). The problem with this from an IRS/government view is that they keep losing millions/billions of dollars in money because of this. I think the corporate federal tax rate is around 35% and that is without state taxes.       Unfortunately when you have less and less money at home - less investment at home happens. Corporations stop doing business at home because they have more money somewhere else - and it makes sense to move more of the company to where the money is or to more favorable tax locations. Even worse - the corporation might just ""save"" its money somewhere else and kill all reinvestment - thus the money is effectively dead to the rest of the economy.      There is a lot of talk about a 'one-time' repatriation tax to allow companies that have dodged their tax burdens to have their money come back to the US (and thus can be used locally) at 10% instead of 35% since there is theroretically a vast amount of cash that would be injected into the US economy. The government is hoping this stimulation will help GDP grow, taxes grow, and help the economy as a whole. In reality, it will reward corporations that broke the law (even though everyone does it), and probably just go into savings accounts here in the US - and not be the ""silver bullet"" to the economy on verge of collapse again." Rich people do have money just lying around.  Give a rich person money and it will, what?  Go into savings of some sort.  The wealthy ideally put their money into rent-creating things, which is awesome for them and less awesome for the rest of us, as it gives them money without producing anythig else for the rest of us.  The ultimate rentier is someone like Mitt Romney, that stripped corporations of their assets and stripped future pensioners of their pensions all to put money  in his and his investors' pockets.  All these cool bubbles, also driven by too large of pools of money lying around.  Currently, we're witnessing the popping of the latest oil bubble.  But, commodity speculation of all types has been something of a major problem lately because of exactly this.  Too much money in too few hands. This kind of questions keeps repeating itself on this site and the answer is generally it doesn't matter. As you said yourself, there are costs either way, and these costs are comparable. Generally, merchant fees differ tremendously between the different kinds of merchants, and while gas stations and video rentals may pay up to 5% and even more, charitable organizations and community services are usually not considered as high fraud risk operation and are charged much lower fees. Either way, paying employees, managing cash/check deposits or paying merchant fees is part of the charity operational expenses. Together with maintaining offices, postal office boxes, office supplies, postage expenses and formal stationary and envelopes needed for physical donations handling. I would guess that if the charity's majority of donations come on-line as credit card/paypal payments - check handling will be more expensive. So I suggest you take the route you consider majority of donors pay - that would be the cheapest for them to handle. I would guess, credit cards being the most convenient - would be the way to go. That is telling about our financial system. I suppose a lot of the derivative stuff is due to functional debt? However lets leave this for now.   What I am getting at is that how can there be a way for rich people to be richer than they where supposed to, if we know where all the money is. How do I withdraw a large sum from my bank and give it to a money management firm? Either write a check to the Money Management firm or wire transfer the funds to the account mentioned.