PayPal Savings Account Review 2024
If you regularly use PayPal to send and receive funds or make purchases online, you might wonder whether the Savings feature is worth it. This PayPal Savings account review walks you through the most important things to know.
PayPal Savings is a high-yield savings account that you can open online or using the PayPal app. The savings account features a competitive annual percentage yield (APY) with no minimums or fees.
PayPal Savings Account At-a-Glance
Overall Impression
The PayPal Savings account could be a convenient savings option for people who already use PayPal and want to earn a great rate on their money.
With no minimum balance or deposit requirements and no fees, it’s an attractive alternative to savings accounts at traditional banks. FDIC coverage through Synchrony Bank protects your money up to $250,000.
Compare the Best Savings Account Rates
Savings rates are higher than they’ve been in years, but if you’re using a traditional, big-name bank, you’re missing out on these rates.
Here are our top picks for those who want to earn the highest interest on their savings.
Paypal Savings Pros and Cons
When searching for a savings account, it’s always helpful to consider the main benefits and potential drawbacks. Here are some things we like (and don’t like) about PayPal Savings.
Pros
- Savers earn one of the best APYs around for an online savings account.
- It’s easy to open and start saving since no minimum deposit requirements exist.
- No fees means there’s nothing to eat into your interest earnings.
- You can easily transfer money from savings to your PayPal balance account or bank account as needed.
- The auto-savings feature makes it easy to deposit money and grow your balance.
Cons
- You’ll need a PayPal Balance account to open a Savings account.
- There’s no separate ATM card with this account.
- While PayPal takes measures to protect user accounts, the app is a frequent target for hackers and fraudsters.
- Not available to PayPal Business account customers.
Compare to Others
There are several high-yield savings accounts, and knowing your options is helpful. To save time, we’ve reviewed four competitor savings accounts that you might consider instead of PayPal.
M1 Savings
M1 Finance is primarily known as an investing platform, but you can also open a high-yield savings account here. The APY is one of the highest available among online banks. No minimum account balance is required, but you need an M1 Plus subscription to qualify for the highest APY. The fee is $10 per month or $95 annually.
One thing that sets M1 Savings apart is the amount of FDIC coverage offered. Instead of the usual $250,000 coverage limit, your deposits are insured up to $5 million through B2 Bank’s Insured Deposit Network Program.
Read our full M1 Savings account review.
Save Market Savings
The Save Market Savings account combines a high-yield deposit account with an investment account. As such, you can earn a significantly higher rate on your savings over a one-year or five-year term. Deposits are FDIC-insured through Webster Bank.
The minimum to open an account is $1,000, and instead of a monthly maintenance fee, you’ll pay a 0.35% management fee. You can earn up to $15,000 in referral bonuses for referring friends and family to Save.
Read our full Save Market Savings account review.
LendingClub High Yield Savings Account
The LendingClub High Yield Savings account earns slightly higher APY than PayPal Savings. There are no minimum balance requirements, though you must make a minimum deposit of at least $100 to open an account. LendingClub doesn’t charge a monthly maintenance fee.
You’ll get a free ATM card with this savings account, which is a departure from other savings accounts that don’t include this benefit. You can make unlimited free transfers to and from your savings account and accounts at other banks.
Read our full LendingClub High Yield Savings account review.
Bask Bank High Yield Savings Account
Bask Bank offers a higher APY to savers with no minimum deposit or balance requirements. There are also no monthly fees of any kind. You can open an individual account or a joint savings account with Bask.
In addition to high-yield savings accounts, Bask offers CD accounts with competitive rates. You’ll need at least $1,000 to open a CD.
Read our full Bask Bank High Yield Savings account review.
How PayPal Savings Works
PayPal Savings is a high-yield savings account that you can open if you have a PayPal Balance account. Since PayPal is a fintech platform and not a bank, banking services are offered through Synchrony.
You can open a Savings account online or through the PayPal app if you have a PayPal Balance account. You won’t need a minimum deposit, but you’ll need at least $1 in savings to earn interest. With the auto-save feature, you can transfer money from your PayPal Balance account or bank to earn interest and set up recurring deposits.
Who Is PayPal Savings For?
PayPal Savings has some excellent features but may not work well for everyone. You might consider this account if you:
- Already use PayPal to send and receive money or payments
- Don’t mind keeping your savings in an online bank account
- Want to earn a decent rate on your savings
- Would like a savings account with no minimum deposit or minimum balance requirements
- Want to avoid steep banking fees
- Prefer to use automatic tools to grow savings
- Want to be able to set up individual savings goals inside your account
You may not like this account as much if you’re looking for a savings option that offers an ATM card. The only way to withdraw cash is to transfer it to your PayPal Balance account or an external bank account, then use that account’s linked debit card to visit an ATM.
Rating the Features
When considering a savings account, it’s wise to look closely at the features and benefits to know how the account might work for you and where it may fall short. Keep reading to learn how the PayPal Savings account features measure up.
User Experience
If you’re already a PayPal customer, then you’re probably familiar with what kind of user experience the app and website have to offer. It’s easy to open this account and fund it, and equally easy to transfer money out of it to your PayPal Balance account or a linked bank account. The only accessibility issue may be the lack of an ATM card tied to your PayPal Savings account.
Fees
There’s no monthly maintenance fee for PayPal Savings, but you might pay fees to use other PayPal features. For example, receiving payments from some internationally can result in a fee or convert currencies. Overall, it’s a good option if you’re looking for fee-friendly banking.
Rates
The interest rate and APY you can earn with PayPal Savings are on par with what you can get from other top online savings accounts. Is it the highest rate? No, some banks can pay even more interest. But the APY is still attractive enough to make PayPal a contender if you’re looking for a new high-yield savings account.
Minimum Deposit
As mentioned, you don’t need to make a minimum deposit to open a PayPal Savings account. You don’t need to meet minimum balance requirements each month, either. Those are marks in its favor, as some savings accounts may require you to deposit $100 or more just to get started and charge you a fee if your balance falls below a certain threshold.
Tools, Extras
The PayPal Savings account is pretty basic because it doesn’t come with many extra bells and whistles. One nice feature, however, is the option to set up savings goals inside your account.
You can create a goal, set a target for achieving it, and choose how much you want to save weekly or monthly. The auto-save feature lets you set up recurring transfers to make funding your goals as simple as possible.
Customer Service
PayPal customer service is available by phone or secure message. If you need to call, support is available at 1-888-221-1161 from 6 a.m. to 6 p.m. PT, Monday through Friday. You can also search for answers in the PayPal Help Center or chat with the PayPal Assistant.
Access
PayPal is available worldwide, and you can manage your account online or through the PayPal mobile app. There are no branches, but that’s typical of online savings accounts.
Safety and Security
PayPal takes security seriously and employs numerous measures to protect customer accounts. It’s helpful to know how to defend yourself against PayPal phishing scams, which routinely make the rounds. If you receive a suspicious-looking email regarding your account, you can forward it to phishing@paypal.com.
How to Get Started
You’ll first need a PayPal Balance account to open a PayPal Savings account. If you already have one, you can log in online or through the mobile app to set up your savings account.
Once logged in, you can click the “Finances” tab and click it, then select the “Savings” tab. You’ll then just need to follow the prompts to ask how you want to receive your statements and guide you through the opening process.
This shouldn’t take more than a few minutes, and you can choose how to fund your account. Again, the options include using money from your PayPal Balance account or transferring funds from an external bank account.
Frequently Asked Questions (FAQs)
PayPal offers a high-yield savings account with no minimum balance requirements, minimum deposit requirements, or monthly fees. You can open this account if you have a PayPal Balance account.
PayPal limits you to depositing $250,000 into your savings account, which reflects the current FDIC coverage limit. PayPal reserves the right to transfer amounts above that limit to your Balance account and reject any incoming transfers that would put you over the limit.
Keeping savings in a PayPal account might be a good option if you want to earn a solid interest rate and don’t mind forgoing access to ATMs or branch banking. You may want to look elsewhere if you’d like to be able to withdraw cash or if you think you can get a better rate for your money with a different bank.
