'They're swimming for money': Mystery after bundle of cash found washed up in surf

Police are investigating after a mysterious bundle of cash was found washed up on a beach on NSW's south coast.

Residents were surprised to a bag of cash and banknotes floating in the water at Kendalls Beach in Kiama at around 1.20pm on March 20.

NSW Police confirmed to 9news.com.au officers responded to a call about the money and spoke to a woman at the beach.

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Anna Tydd, a regular at Kendalls Beach, told The Bugle she arrived at the beach to find an unusual number of swimmers in the water.

"My friend Ian returned with goggles on and said, 'They're swimming for money'," Tydd said.

Ian said $100 notes were found floating in the surf, with one swimmer emerging from the water with a rolled wad of $100 bills worth around $1000.

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Tydd said locals had no idea if the cash was related to drugs or if it was counterfeit.

She reported the matter to police and officers confirmed an investigation is now under way.

Under NSW law, finding money and keeping it without attempting to find the owner can be considered theft or larceny.

There is an old "finders keepers" rule which may apply, however you must make reasonable inquiries to find the owner or turn it over to the police.

Anyone with information is urged to come forward and contact Lake Illawarra Police Station or Crime Stoppers on 1800 333 000.

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