Paypal Interest Rate formidable

[jmjj215]

Hey guys, for all our talk about this and that bank offering 3% or whatever - my business Paypal account is a moneymarket account - unlimited withdrawals/deposits, no minimum and it pays 3.22%

Not too shabby, eh?

[obi_positive]

Not too shabby and I really like my business account. Their rates looked awful last year. Looks like it was at 1.37% in 2004. ING has also fluctuated in the past. Emigrant offers 3.25% thoughout 2005.

PayPal also notes that they are not FDIC insured and could possibly lose money. Probably not a big risk, and a boon for anyone needing a great account to accept online credit card payments. Thanks for the info.

[Bluezy]

Also note that Paypal gives you a certain amount cash back for purchases. So if you treat the card like a pre-loaded credit card, you can make a little back for your purchases. Paypal also accepts several currencies, so it can be loaded with £ and Euros should you choose to travel in the UK.

True, Paypal is not FDIC insured, so don't load much more than you plan to spend and it is fine.

[doglar]

Paypal does have incredible rates still and does seem to increase their rates faster than any other bank so that they are at the top for a little bit. Paypal increased to 3.22% in the first half of July when ING was at a mere 3.00% (and ING only got up to 3.15% APY in the third week of July - and don't expect to move for a while). There are problems with keeping large amounts of $ with paypal. Unfortunately paypal will be discontinuing their free bill pay on 8/1/05, so the only thing left is bank to bank, ebay stuff and person to person transfers .... Also with billpay, the max per day was $2500. And it is not FDIC insured....It was great to use as a "checking" account to pay off bills ... but now it will resemble more of a saving account. I will be trying out the Bank of Internet checking at 3.00% ......

[jmjj215]

There are problems with keeping large amounts of $ with paypal.

What are they? I run my business through Paypal - so that's another reason paypal is so great. The fees are very reasonable.

[doglar]

I have a personal account - so there are no fees whatsoever (unlike premium or business accounts where there are fees of 2.4% to 3.4% + $0.30 USD on incoming $ from parties other than yourself). This almost cancels the 3.22% interest being made on this money, unless very little of the incoming money comes from external sources. If I had $10k, the reason I would not put it in paypal 1) if I had it there to keep it liquid and maximize interest $ till the last minute a bill was due (as one might do when paying a large bill coming up say $5k), you will need to remember that 2 days are needed to send the money in 2 x 2.5k chuncks or run the risk that the payment may not be on time and get slapped with late fees, increased rate etc. 2) I could loose the 5K because there is no FDIC insurance. And since it is loosing the billpay option, my reasons for using paypal get smaller....the boring choice is to keep the $5k in a checking at zero interest and let bill pay do its majic. Another option usefull with paypal, is if you pay persons large sums (alimony) and have a cashback credit card, you can get perhaps 1% back of the money going out via paypal on the card. The better option is to find something like possibly may exist in Bank of Internet.... free bill pay option, 3% interest, FDIC and hopefully no limits no movement (e.g. 2.5k limit per day) as a checking usually does not have such limits...the only limitation would be to ensure the $1000 min avg balance remains to avoid a $4 monthly fee.

[doglar]

i guess I took too long to answer...so my answer was lost....maybe I can go back and paste it in...
I have a personal account - so there are no fees whatsoever (unlike premium or business accounts where there are fees of 2.4% to 3.4% + $0.30 USD on incoming $ from parties other than yourself). This almost cancels the 3.22% interest being made on this money, unless very little of the incoming money comes from external sources. If I had $10k, the reason I would not put it in paypal 1) if I had it there to keep it liquid and maximize interest $ till the last minute a bill was due (as one might do when paying a large bill coming up say $5k), you will need to remember that 2 days are needed to send the money in 2 x 2.5k chuncks or run the risk that the payment may not be on time and get slapped with late fees, increased rate etc. 2) I could loose the 5K because there is no FDIC insurance. And since it is loosing the billpay option, my reasons for using paypal get smaller....the boring choice is to keep the $5k in a checking at zero interest and let bill pay do its majic. Another option usefull with paypal, is if you pay persons large sums (alimony) and have a cashback credit card, you can get perhaps 1% back of the money going out via paypal on the card. The better option is to find something like possibly may exist in Bank of Internet.... free bill pay option, 3% interest, FDIC and hopefully no limits no movement (e.g. 2.5k limit per day) as a checking usually does not have such limits...the only limitation would be to ensure the $1000 min avg balance remains to avoid a $4 monthly fee.

[jmjj215]

I have a business account and they levy 2.2% on the gross, +.$30. I don't consider that a loss of interest, I consider it a cost of doing business. Many other online payment processing services charge much higher rates and are not nearly as ubiquitous.

I have zero complaints with using PayPal as part of an online business.