What Are Source of Funds and Source of Wealth?

Source of Wealth (SoW) refers to the origin of your overall financial assets, essentially how you built your wealth. It covers the activities that contributed to your net worth, such as your salary, inheritance, business profits, or investment growth. For example, if you accumulated wealth through your career earnings or by selling property, this would be considered your Source of Wealth.

Source of Funds (SoF), on the other hand, is more specific to where the money for a particular transaction comes from. It’s the direct origin of the funds used in a transaction, often linked to your Source of Wealth. For instance, if you use your bank savings to fund a transaction, your Source of Funds is the bank account, while your Source of Wealth is the salary that originally generated those savings.

Both Source of Funds and Source of Wealth are often required to comply with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations.