Beyond payments: How Cash App can manage your money
Cash App has become one of the most popular payment apps on the market and is widely recognized as one of the leading money transfer apps for sending, receiving, and managing funds quickly and securely among digital money transfer apps. It makes it easy (and free) to send and receive money, save and invest, and manage your money. It has several key features you won’t find with other payment apps, and it allows you to unlock even more perks when you utilize more of its services. Keep reading to learn more about how Cash App Works, who it’s best for, and how it compares to other popular payment apps.
What is Cash App?
Cash App is a financial services platform and app that allows users to send, receive, invest, and manage their money. As a non-bank financial services platform, it offers a comprehensive suite of financial features, eliminating many of the fees and red tape in traditional banking. Its services include free instant transfers, banking, investing, and tax filing.
Cash App is a subsidiary of Block, Inc., formerly known as Square, Inc. It was founded in 2013 with the goal of taking the pain out of peer-to-peer payments. Today, it has more than 50 million active monthly users and has expanded its services far beyond its original mission.
How does Cash App work?
To get started, users need to download Cash App on their smartphone before accessing its features.
Cash App is a smartphone app with some limited features available on a web browser using a computer. It offers a variety of financial services to help its users manage their money.
Sending and receiving money
Cash App started as a peer-to-peer transfer service, and it still functions as one today. It’s a solid option for everything from splitting a bill to chipping in for a large purchase.
When sending money to friends and family in Cash App, you simply enter their phone number, email address, or $cashtag and send the desired amount. The money will transfer instantly. If you have a balance in your Cash App account, the money will be drawn from there. Otherwise, Cash App will pull the money from a linked debit card, bank account, or a linked credit card. Keep in mind that sending money with a linked credit card incurs a fee, while using a bank account or debit card typically does not.
Cash App transfers are instant, but withdrawals aren’t. If someone sends you money, you can withdraw it for free with a standard transfer, which can take up to three days. Alternatively, you can pay an instant transfer fee to have the money within minutes. Transferring money between accounts is straightforward and offers flexibility depending on your needs.
Cash App balance and linked accounts
You can use Cash App in one of two ways: with your Cash App balance or with a linked account. To manage your balance and add funds, go to the money tab on the app’s home screen. If you choose to link a bank account or debit card, you’ll simply go into your Cash App account and take the following steps:
- Tap the profile icon in your Cash App account
- Select “Linked Banks”
- Tap “Link Bank”
- Connect your bank account
Once you’ve connected your account, you can use it to deposit money into your Cash App balance or send it to friends and family. You can also add money to your account by setting up automatic transfers, depositing a check with your phone, making cash deposits at participating retailers, or setting up direct deposit to deposit paychecks (we’ll talk more about that later).
Once you have money in your account, you can use it to send to friends and family, spend with your Cash App Card, earn interest on your savings, or invest.
Cash App isn’t technically a bank. Instead, its banking services are provided by its partner banks, Wells Fargo and Sutton Bank, both of which are FDIC-insured. However, your account is only FDIC-insured if you have a Cash App Card, have a Sponsored Account (a teen account), or sponsor a Sponsored Account.
Using the Cash Card
When you open your Cash App account, you’ll have the option to get a free Cash App Card, which is a Visa debit card linked to your Cash App account. The Cash App Card is issued by Sutton Bank, providing the reliability and security of a partner bank. Like other debit cards, it enables you to make purchases and cash app card transactions directly from your account balance.
It has no hidden or monthly fees, but there is a $2.50 fee to withdraw cash from an ATM, in addition to any out-of-network fees the ATM itself charges. However, you can have Cash App’s fee waived if you have more than $300 in paycheck direct deposits each month.
The Cash App Card allows you to save on your purchases with partner offers. For example, you might get an offer to save 10% on your groceries or 5% on your next coffee shop purchase.
Other Cash App Card features include:
- Card customization
- Cash App Afterpay
- Debit card lock and unlock for security and management
- Real-time transaction alerts
- 24/7 fraud monitoring
- Round-ups to invest or save your spare change
Direct deposit with Cash App
If you use Cash App for banking, you can set up direct deposit provided by Cash App to have your paychecks deposited into your account each month. You’ll have access to your paychecks up to two days earlier than you would with a traditional bank account.
Once you set up direct deposit provided by Cash App and receive at least $300 per month in deposits, you’ll open up several other account benefits, including:
- Free overdraft protection of up to $200
- Boosted interest on your savings
- Free ATM withdrawals at in-network ATMs, waiving the normal $2.50 fee
Cash App direct deposit, provided by Cash App, is best for anyone with a regular income. But since the threshold to get all the benefits, including free ATM withdrawals, is only $300, you don’t necessarily have to earn a lot to make the most of it.
Compare savings account rates
Additional features of Cash App
In addition to its core features, Cash App also offers brokerage services and a handful of other features and perks.
Investing in stocks
You can invest in your Cash App account with as little as $1 using Cash App Investing. Investment services are provided by Cash App Investing LLC, a registered broker-dealer and member of the Financial Industry Regulatory Authority (FINRA). You can buy individual stocks (including fractional shares) and exchange-traded funds (ETFs) with no commission fees and track your growth over time. And if you don’t have enough in your Cash App balance, it will simply pull the money from your linked account.
Cash App Investing allows for automatic investing with daily, weekly, or biweekly deposits. And with Cash App’s round-up feature, you can use your spare change to invest even more.
Cash App Investing LLC is SIPC-insured, just like other brokerage firms. That means that if Cash App goes out of business, you’ll be protected from losing the money you’ve invested (though this doesn’t protect you from losses if your investments perform poorly).
Buying and selling Bitcoin
In addition to stocks, you can also use your Cash App account to buy and sell Bitcoin with as little as $1. The process is similar – you can set up automatic investments and buy Bitcoin with your round-ups. Additionally, you can choose to set a percentage of your direct deposits each month to go directly to Bitcoin.
However, it’s important to understand that trading Bitcoin involves risk, and you can lose money. Before investing, make sure you are aware of the potential risks and only invest what you can afford to lose.
In addition to buying and selling Bitcoin, Cash App also allows you to send Bitcoin to your friends and family. Many transfers are nearly instant, just like cash transfers.
Cash App keeps your Bitcoin safe by storing most of it in offline, cold storage, meaning it’s more difficult for others to steal it. You also have the option of transferring your Bitcoin into your own wallet using Cash App’s withdraw feature.
Cash boosts
As we briefly mentioned, your Cash App Card can help you save on purchases from your favorite retailers. When you open a Cash App Card, you’ll get access to offers, which you can add to your account and save money. As long as you have the Cash App Card, you can take advantage of offers with either your Cash App Card or Cash App Pay.
Available offers may differ from time to time. You can save between 5% and 15% at your favorite retailers, coffee shops and restaurants, apps, activities, and more.
Borrowing from Cash App
Cash App allows certain users to borrow up to $500 at a time. There’s no credit check required, meaning it’s easier than qualifying for a personal loan or a credit card. You’ll pay a 5% flat fee, which could amount to up to $20 for the maximum loan amount.
Loans aren’t available for all Cash App customers. While the platform doesn’t clearly outline the eligibility requirements, you’ll need to have direct deposit set up and have regular deposits coming into your account. Users online report initially having access to small loans, and then being able to borrow larger amounts as they repaid them.
How does Cash App compare to other payment apps?
Cash App is one of several popular payment apps on the market. Let’s take a look at how it compares.
Cash App vs. Venmo
Of the popular payment apps on the market, Venmo is the one that’s most similar to Cash App. Some of the features they have in common include:
- Send and receive money
- Debit card access
- Online payments
- Direct deposit
- Buy and sell crypto
Venmo doesn’t allow you to invest in stocks like Cash App does. It also doesn’t offer a return on your savings like Cash App. Finally, Venmo doesn’t support international payments, while Cash App does. However, Venmo does offer business services. You might prefer it over Cash App if you’re a business owner and want to accept online payments.
Cash App vs. PayPal
PayPal is the oldest of the popular payment apps, dating back to 1998. Like Cash App, PayPal allows you to transfer money to friends and family. Its personal services include peer-to-peer payments, a debit and credit card, and buy now, pay later services. But these are just a small part of its business model.
PayPal primarily focuses on online purchases and business services. In fact, when you make an online purchase, you’re usually offered the option of paying with PayPal, either using your PayPal balance, linked bank account, or linked card.
PayPal has stronger buyer protections than other payment apps, making it a good option for online shopping, even if it’s not your preferred app for personal financial services.
Cash App vs. Zelle
Zelle doesn’t have as many features as Cash App, but its real draw is its simplicity. Zelle is the only one of the popular payment apps that allows you to transfer money directly to your friends and family’s bank accounts rather than to a third-party platform, where they’ll then have to transfer the money to their bank account.
To send money via Zelle, you simply enter the email address or phone number of the person you want to send money to, along with the amount you want to send. As long as the recipient is already a member of Zelle, the money will be deposited directly into their bank account almost instantly.
Zelle may be a good option if you want an easy way to send money to your loved ones, but don’t need the added features that Cash App has to offer.
Cash App vs. Apple Pay / Google Pay
Apple Pay and Google Pay are both payment services, but with different primary goals than Cash App. These two services offer built-in mobile wallet functionality. If you have an iPhone, you’ll have built-in Apple Pay, while Android phones come with Google Pay.
The primary service Apple and Google pay offer is in-store tap-to-pay, allowing you to easily make in-person purchases without your physical debit card. They can also be used for online purchases made from your phone. Both services lack many of the banking and personal finance features that Cash App has to offer, including stock and Bitcoin investing, high-yield savings, direct deposit, and more.
Is Cash App safe to use?
Cash App is a secure platform that uses encryption and fraud detection technology to protect user data and transactions. Cash App accounts are safeguarded by advanced security features such as PIN, Face ID, and Touch ID, helping to prevent unauthorized access and keep your funds safe. Here are some other safety measures in place:
- Recipient confirmation: If you try to send money to someone who isn’t in your contacts, Cash App will double-check the transaction with you before sending it.
- Activity alerts: You’ll get notifications of any suspicious activity in your account, including new logins.
- Privacy controls: You can control what information you share and who can request money from you.
- Identity verification: Cash App requires everyone who signs up to verify their identity to keep other users safe.
- FDIC/SIPC protection: Your stocks in Cash App are SIPC-insured, and your cash is FDIC-insured as long as you have a Cash App Card or Sponsored Account.
Cash App support is available to help with any security concerns, account verification, fraud issues, or if you suspect unauthorized access to your Cash App account.
As with other financial services, it’s also your responsibility to keep your money safe. Be careful to only send money to people you know, and avoid scams that ask you to send your money to someone you don’t know.
Pros and cons of using Cash App
Pros of Cash App
- Cash App offers a variety of free financial services
- You can earn interest on your savings in Cash App
- Get debit card access with savings opportunities
Cons of Cash App
- Cash App charges several fees, including ATM and instant transfer fees
- Cash App balances are only FDIC-insured in select situations
Who is Cash App best for?
Cash App is a great option for anyone who wants to send, receive, and manage money all in one platform. It offers free peer-to-peer payments, so you can use it to send money to friends and family. With its banking, savings, and debit card services, it can be a good place to store some of your money.
Cash App may also be a good option if you want to start investing in an accessible way. You can invest in stocks, ETFs, and Bitcoin with just $1, meaning you don’t have to worry about high investment minimums that some platforms have.
Cash App has relatively low direct deposit thresholds to open up more benefits, so consider it even if you have an inconsistent income, such as if you’re a freelancer or gig worker. And with the borrow feature, it can help you get through those leaner months.
That being said, Cash App isn’t right for everyone. It’s not a good substitute for a bank account if you don’t plan to get the debit card, since that’s how you access the FDIC insurance. It’s also not the right choice for many traditional banking needs or if you want strong dispute resolution. For most users, Cash App is a resource they can use on top of their traditional bank account, not instead of one.
How to set up Cash App
Setting up a Cash App account is fast and easy. You can have your account up and running within a minute or two. Here’s how to get started:
- Download the app
- Register with your email or phone number
- Link a bank or debit card
- Create your $Cashtag
- Order the Cash Card (optional)
Once your Cash App account is set up, you can decide which features to use. You can link your bank account or debit card, and either transfer money to your Cash App balance or send money using your linked accounts. You can also explore the savings and investing features and set up your direct deposit.
Conclusion: Is Cash App right for you?
Cash App may be right for anyone who wants to send money to and receive money from friends and family without added fees or wait times. And with its added features, it’s also a great place to manage your money (though not necessarily as a substitute for a bank account).
Its teen accounts also make it a good option for families. You can set up a Sponsored Account for your teen and use it as an opportunity to teach them about proper money management.
That being said, Cash App isn’t right for everyone. Depending on your needs and goals, you may find a different payment app is a better fit. For example, business owners might prefer Venmo or PayPal, while someone who wants simple transfers with no added features might prefer Zelle.
Frequently asked questions about Cash App
Nearly every Cash App feature is free to use, but some fees may apply. For example, you’ll pay $2.50 for ATM withdrawals (not including any fees the ATM charges), 3% to send money with a credit card, and between 0.5% and 1.75% for instant withdrawals.
You can technically use Cash App without a bank account. Rather than linking a bank account, you would just keep your money directly in your Cash App balance. However, your money may not be quite as secure in your Cash App account as it would be in a traditional bank account, as it’s not technically a bank.
Unfortunately, you can’t typically cancel a Cash App payment once you’ve sent it. One of the benefits of Cash App is its near-instant transfers, but this also makes it difficult to cancel payments. You may be able to cancel select payments, and you can always ask for a refund if you sent a payment by mistake, but there are no guarantees.
Most Cash App users can send up to $1,000 within any 30-day period. However, if you’re a verified account, you can send up to $40,000.
