PayPal Savings Account Review: Pros and Cons
Are you searching for an accessible savings account that will enable you to save more in the long run? PayPal’s savings account has quickly made waves within the online financial space, with plenty of accounts offering competitive interest rates and low minimum deposits. But before creating an account, it’s wise to read reviews and gather insights from existing users. Why have we taken to Reddit to bring you an exhaustive PayPal Savings Account review?
Paypal is a widely popular payment processing platform used by individuals and businesses alike for money transfer, bill payment, purchase transactions online. In 2018, PayPal introduced their high-yield savings account: PayPal Cash Mastercard Savings Account. This account offers an attractive interest rate of 0.50% APY (Annual Percentage Yield), surpassing even the national average of 0.05%.
How Does it Work?
Opening a PayPal Savings Account Is Easy Opening a PayPal Savings account is straightforward and simple; all it requires is having either a PayPal Cash or Cash Plus account before applying. Once eligible, enrolling into this program through your dashboard. Maintaining an account does not involve fees or minimum balance requirements, and does not incur any annual maintenance charges. However, there are daily limits on how much money can be deposited or withdrawn from a PayPal savings account. Your funds are FDIC-insured (Federal Deposit Insurance Corporation) up to $250,000 per depositor at each insured bank.
Pros of Utilizing PayPal Savings Account
- High Interest Rate – As previously noted, PayPal savings accounts offer higher rates of interest than many traditional banks.
- User-Friendly – Saving with PayPal makes opening an investment account straightforward, eliminating lengthy application processes or piles of paperwork as obstacles to opening one. Manager your account online easily with PayPal savings accounts and enjoy hassle-free management!
- No Fees – Unlike banks which charge monthly maintenance fees or require minimum balances, PayPal savings accounts have no such fees attached to them whatsoever.
Cons of Using PayPal Savings Account
- Limited Accessibility – PayPal savings accounts have limited accessibility compared to traditional banks, making access more challenging. Simply deposit or withdraw money through PayPal isn’t always ideal for people who prefer physical branches or ATMs; and daily transfer limits apply when sending funds between PayPal Cash Plus accounts and savings accounts. Maximum Deposit Cap: $5,000 and Minimum Transfer Amount: $1 If you plan on depositing large sums into your savings account, PayPal might not be your ideal solution. Daily deposit limits of $10,000 mean it could take several days or weeks before you can completely fund your PayPal savings account.
We scoured various threads on Reddit to understand what experience users had with using PayPal savings accounts. Though there may be restrictions in access and daily transfer limits, these disadvantages are outweighed by the advantages offered by FDIC-insured funds with competitive interest rates and reasonable daily transfer limits. If you already use PayPal and don’t mind its limited accessibility, this could be the ideal savings account for you.
References:- https://www.paypal.com/us/webapps/mpp/cash-card http://reddit.com/r/personalfinance/comments/9m1d4x/paypal_savings_account_review https://www.investopedia.com/terms/f/fdic.asp