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PayPal is a payment app that also offers a high-yield savings account.
PayPal/Insider
The bottom line: You might like the PayPal Savings Account if you use the PayPal app often and are looking to earn a high interest rate on a savings account. If you prefer more of a traditional banking experience or more bank account options, you might choose another institution.
Pros and cons
ProsCons
High interest rate on savings account
No minimum balance requirements or monthly service fees
Savings tools to help you save for personal finance goals
Customer support by phone or live chat
Online-only accountTransferring money from a linked bank account may take up to six business days to processCan’t open if you use a PayPal business account (Only if you have a Paypal personal account)No joint bank accountsNo checking account, money market accounts, or CDs
PayPal Savings Account
The PayPal Savings Account is a solid option if you’re comfortable with an online-only banking experience. You’ll primarily manage your account through the PayPal app and utilize PayPal Balance to manage your account.
The account notably pays a competitive interest rate and doesn’t charge monthly service fees. It also lets you set up individual goals by using the accounts Goals feature. You may create Goals with a specific name and target amount to help you monitor your progress.
How PayPal works
PayPal is a payment app that allows you to send money electronically to friends, family, or businesses. You can also choose to open a PayPal Savings Account with PayPal if you have a PayPal personal account.
To add money to the PayPal Savings Account, you’ll need to use your PayPal Balance. You may transfer money from a linked bank account to your savings account via your PayPal Balance. However, transfers between accounts might take up to six business days to process. If you would like to deposit cash into your savings account, you could go to a select retailer and deposit money into your PayPal Balance (the retailer may charge a fee of up to $3.95). Then you can move money from the PayPal Balance to your savings account.
PayPal Balance has additional features, like early direct deposit and mobile check deposit.
Customer support is available by phone or live chat from 6 a.m. to 6 p.m. ET every day.
PayPal is a fintech company, not a bank. However, banking services are provided by Synchrony Bank, an FDIC-insured bank. Money deposited in the PayPal Savings Account is eligible for up to $250,000 in FDIC insurance coverage.
PayPal trustworthiness and BBB ratings
We use ratings from the Better Business Bureau to see how banks respond to customer issues.
PayPal received an A+ rating from the BBB, and its partner bank, Synchrony, also has an A+ rating.
A good BBB rating won’t necessarily guarantee your relationship with a bank will be perfect. Consider talking to current customers or reading online customer reviews to get a well-rounded perspective of the businesses.
Neither PayPal nor Synchrony Bank has been involved in any recent public controversies.
PayPal Savings Account vs. Chime Savings Account
Chime and PayPal are two online-only fintech platforms. Both have strong fee-free high-yield savings accounts with zero minimum balance requirements. Deciding between the two will likely depend on what you’re looking for in your bank experience.
PayPal could be a better choice if you’re searching for a competitive interest rate. The PayPal Savings Account pays PayPal Savings Account, while the Chime Savings Account only offers Chime Savings Account. However, keep in mind rates can fluctuate, so this may change in the future.
You also might favor PayPal if you’d like a savings account that lets you save for individual goals. The Chime Savings Account doesn’t have this feature.
If you are also looking to open a checking account, you will likely lean more toward Chime. You will need to open a Chime Checking Account before you open a Chime Savings Account. In combination, the two accounts provide a lot of beneficial banking features. For example, with Chime Checking, you won’t have to worry about foreign transaction fees if you’re traveling overseas and using an ATM. You’ll also be able to round up debit card purchases up to the nearest dollar and put spare change in your Chime Savings Account.
PayPal Savings Account vs. Ally High-Yield Savings Account
Both PayPal and Ally offer fee-free high-yield savings accounts with budgeting tools to help you save for individual goals.
You may favor Ally if you would prefer to open multiple types of bank accounts at one financial institution. Ally has a checking account, savings account, money market account, and CDs. At PayPal, you’ll only be able to open a savings account.
If you’re strictly searching for a high interest rate on a savings account, you might find PayPal compelling. The PayPal Savings Account currently pays a slightly higher interest rate than the Ally High Yield Savings Account.
Frequently asked questions
Does PayPal offer a savings account?
Yes. PayPal offers a PayPal Savings Account. Paypal is a fintech company, not a bank. That said, banking services are provided by Synchrony Bank, Member FDIC.
Is PayPal Savings FDIC insured?
Yes, the PayPal Savings Account is FDIC insured through Synchrony Bank. Up to $250,000 is secure in an individual bank account.
Who is eligible to open a PayPal Savings Account?
You may open a PayPal Savings Account if you have the PayPal app and have set up a personal account. You won’t be eligible for an account if you only have a PayPal business account.