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Should You Get a Savings Account from Cash App?
The growing payment app offers a new feature: Is it worth it?
You’ve already got the Cash App on your phone and it is a super easy way to send money to friends or family. Heck, you can even get a debit card from them and use it to access your Cash App balance when you’re in brick-and- mortar stores or shopping online.
Now, Cash App is offering a savings account product.
I mean, why not save money on the same app where you spend it so easily.
Except, well, the Cash App savings account doesn’t really work like traditional savings accounts OR even nonbank/neobank/fintech savings accounts.
Jason Mikula at Fintech Business Weekly highlights the key problems with the Cash App savings product:
Users earn no interest on their savings. In a rising rate environment, where other digital bank accounts/wallets offer rates as high as 3.75% APY, this is a meaningful distinction, though users who hold small balances may value convenience over the few dollars in interest they would earn.
No FDIC insurance (unless users hold Cash App’s debit card, Cash Card). The likelihood of Block going bankrupt seems remote, but, in a climate of heightened sensitivity post-crypto meltdowns, this is a…
