PayPal Savings Account Interest Rate (February 2025) (original) (raw)
Last Updated: Nov 1, 2024
PayPal’s savings account features a 4.30% APY — much higher than the national average savings rate — plus convenient savings tools and no monthly fees.
Ashley Donohoe Principal Researcher Ashley Donohoe Contributor
Ashley Donohoe is a personal finance writer, Financial Planning and Wealth Management Professional and Certified Financial Education Instructor based in Cincinnati. She covers banking, loans, investments and taxation, and has written for several prominent personal finance websites. In her spare time, Ashley enjoys playing the piano and spending time in nature.
Editor Jared Macarin Editor Jared Macarin Editor
Jared Macarin is an editorial veteran who joined the MarketWatch Guides team after more than 20 years in the newspaper industry. He has written for, edited for or designed more than 50 newspapers across the country, winning numerous awards.
Editor Jared Macarin Editor Jared Macarin Editor
Jared Macarin is an editorial veteran who joined the MarketWatch Guides team after more than 20 years in the newspaper industry. He has written for, edited for or designed more than 50 newspapers across the country, winning numerous awards.
Our Research Process
Here’s a breakdown of how we reviewed and rated top banks and credit unions
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154 Institutions Monitored
Our team reviewed 154 of the country’s largest and most prominent financial institutions, from big banks like Chase and Bank of America to credit unions like Navy Federal Credit Union and PenFed Credit Union.
688 Products Studied
Total number of checking, saving, CDs, and money-market accounts that inform our review ratings.
719 Rates Tracked
The accounts with an annual percentage yield (APY) several times the national average rate receive the highest scores. Accounts with the lowest APY offering (under 1%) earn the least points.
10 Professionals Consulted
Before we began our research process, we consulted with financial advisors and industry experts to ensure our evaluations covered the banking product aspects that matter most to potential customers.
Known for its popular online payment service, PayPal also offers an online savings account for customers. This account stands out for its accessible requirements and much higher annual percentage yield (APY) than the national average rate. It also lacks common bank account fees, so it’s a good pick for savers seeking to maximize earnings.
In this article, we at the MarketWatch Guides team will detail how the PayPal savings rate compares to other financial institutions, along with the terms of this account so you can decide if it’s worth it for you.
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Featured Savings Accounts
FEATURED
Lending Club
4.3
APY 3.50%
Bonus N/A
Min. Deposit Amount $0
Earn up to 4.75% APY with $250+ deposits per month
SoFi Checking + Savings
4.8
APY 3.80%
Bonus Up to $300
Min. Deposit Amount $0
SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either 50(withatleast50 (with at least 50(withatleast1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR 300(withatleast300 (with at least 300(withatleast5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/26. See full bonus and annual percentage yield (APY) terms at sofi.com/banking#1.
UFB Portfolio Savings
4.6
APY 4.01%
Bonus N/A
Min. Deposit Amount $0
Unlock up to 4.21% APY, Combine Freedom Checking with Portfolio Savings to boost your savings APY by up to 0.20%
Discover
4.6
APY 3.75%
Bonus N/A
Min. Deposit Amount $0
PayPal Savings Interest Rate
Offered through a partnership with Synchrony Bank, the PayPal savings account rewards savers with a competitive APY that’s much higher than the national average savings rate of 0.46%. It’s also a higher rate than what many traditional banks and some online banks advertise with their savings accounts.
While some competitors might only offer their best rates if you maintain a certain minimum balance, PayPal pays all savers the advertised APY regardless of how much is in the account. Since you won’t need a minimum opening deposit either, the account is ideal even if you’ve just started saving money.
| PayPal Account | APY* | Monthly Fee | Minimum Opening Deposit |
|---|---|---|---|
| PayPal Savings | 4.30% | 0∣0 | 0∣0 |
*APY accurate as of November 15, 2024
PayPal Savings Account Terms
Opening this savings account requires first having a free personal account with PayPal, often referred to as a PayPal Balance account.
Fees
The account has no fees for monthly maintenance or transfers to or from your PayPal Balance account. There are no overdraft fees either, but overdrafts aren’t allowed.
Minimum Deposit
When you apply for a savings account, you won’t have to make a minimum opening deposit. You can later deposit funds from your PayPal balance, a confirmed bank account or a linked debit card. Plus, check deposits and cash deposits are possible if you add those funds to your regular PayPal balance and transfer them.
Interest
This account’s interest compounds daily and is paid out on the last day of each month. Like most deposit accounts, the PayPal savings account has a variable interest rate, meaning it can change at any time at the bank’s discretion.
Balance Requirements
This account has no minimum balance requirements, but your PayPal savings account is limited to a maximum balance of $250,000. This amount is also the typical deposit insurance amount offered through the Federal Deposit Insurance Corp. (FDIC).
Accessing Funds
The only way you can withdraw money from your PayPal savings account is by transferring it to your PayPal Balance account. If you have a negative PayPal balance, the amount you transfer would first be used to offset the balance.
You’ll then have multiple options for withdrawing your money, including spending the money from your PayPal balance, doing a standard transfer to a linked bank account or doing an instant transfer to an eligible debit card or bank account.
Savings Tools
PayPal’s savings account comes with special tools for savers. Along with keeping cash in your general savings balance, you can set up multiple savings goals with names, target amounts and recurring transfers for easier tracking.
Who Is a PayPal Savings Account Best For?
Since the PayPal savings account is an online-only option, it’s best suited for certain banking needs. Here are some customers who could benefit the most from this financial product:
- People who are existing PayPal users: Although you could become a new PayPal customer, it helps to have experience making transactions, having linked accounts and navigating the platform. The savings account relies heavily on your PayPal balance for withdrawals and deposits.
- People who already have primary banks: Since the company isn’t a bank, the PayPal savings account works best if you have an existing bank or credit union for other deposit accounts and financial services.
- People who prefer banking online: You’ll rely on the mobile app and PayPal website to manage your savings since you won’t have an ATM card or physical branch locations.
- People who use savings planning tools: The PayPal savings account is useful for easily managing multiple savings goals and automatically transferring funds.
PayPal Savings Rate vs. Other Top Banks
Savings accounts at competing online banks tend to pay similar rates to PayPal’s account, though some banks may offer slightly higher returns. Traditional banks such as Chase Bank and TD Bank, both of which have standard and relationship rates, usually pay significantly less than online banks and have minimum balance requirements for avoiding monthly fees.
>>Related: Check out our list of the best high-yield savings accounts.
All of these providers require no minimum opening deposit for their savings accounts, and most accounts don’t provide ATM or debit cards. PayPal does have an edge over competitors that limit how many monthly withdrawals you can make, which is common with many savings accounts.
Here’s how PayPal compares to other providers:
| Financial Institution | APY* | Minimum Opening Deposit |
|---|---|---|
| PayPal | 4.30% | $0 |
| Ally Bank | 3.80% | $0 |
| American Express | 3.80% | $0 |
| Capital One | 3.70% | $0 |
| Chase Bank | 0.01% (standard rate)0.02% (relationship rate) | $0 |
| Discover Bank | 3.75% | $0 |
| Marcus by Goldman Sachs | 3.90% | $0 |
| TD Bank | 0.02% (TD Simple Savings) | $0 |
*APY accurate as of November 15, 2024. Rates may vary by location. Rates quoted for Chase are for New York. Rates quoted for TD Bank are for Cherry Hill, N.J. While TD Bank has a high-yield savings account with rates of up to 4.00% , it requires a minimum balance of $100,000.
Additional Ways To Save With PayPal
PayPal doesn’t offer other banking products such as checking accounts, certificates of deposit (CDs) or money market accounts. It does offer other personal financial products and services such as the PayPal Cashback Mastercard, a prepaid Mastercard, a debit card that works with your PayPal balance and PayPal Credit, a buy now, pay later service.
The Bottom Line: PayPal Savings Accounts
PayPal’s savings account can be appealing for savers working toward specific goals. Some highlights are its competitive rate and FDIC coverage, as well as its lack of monthly fees or minimum balance requirements. However, you might prefer other savings options if you’re not comfortable with PayPal’s platform or if you’re looking for in-person support, an ATM card or a higher rate.
FAQ: PayPal Savings Rate
The PayPal savings account is FDIC-insured through PayPal’s partner bank, Synchrony Bank, so your money is protected up to the $250,000 federal coverage limit. This limit applies per bank, per depositor and per account ownership category. If you have existing Synchrony Bank accounts, note that their balances will also count toward that per-bank limit.
A PayPal savings account is already linked to your PayPal account once you sign up, so you don’t need to do anything further to connect them. You can move funds between your PayPal balance and savings account balance.
You won’t pay any penalties for withdrawing funds from a PayPal savings account. However, the only way you can withdraw funds from your account is by transferring funds to your PayPal balance. From there, you could pay fees for instant transfers from your PayPal balance to a debit card or bank account.
Methodology
Our team researched more than 100 of the country’s largest and most prominent financial institutions, collecting information on each provider’s account options, fees, rates, terms and customer experience. We then scored each firm based on the data points and metrics that matter most to potential customers. Read our full methodology.
The top accounts have APYs well over 4.00% and generally don’t charge monthly fees. These accounts also earned points for either having no minimum opening deposit or requiring less than $100. For more details on how we score banks and credit unions across different products, check out our comprehensive methodology here.
- Savings and money market accounts (35% of total score): The best scores go to banks, loans and fintech companies with high interest rates and low or no fees or minimum opening deposits.
- Checking accounts (30% of total score): High marks are given to those with multiple accounts and minimal fees, plus benefits such as reward programs and mobile check deposit.
- Certificates of deposit (20% of total score): Top-rated financial institutions have low or no minimum opening deposits, as well as a variety of term options and specialty CDs for flexibility.
- Banking experience and access (15% of total score): Providers that excel in this category have large branch and ATM networks and multiple checking and savings accounts, and they earn more points for offering CDs and money market accounts.
*Rates accurate as of November 15, 2024
**Data accurate at time of publication
Editor’s Note: Parts of this story were auto-populated using data from Curinos, a research firm that collects data from more than 3,600 banks and credit unions. For more details on how we compile daily rate data, check out our methodology here.
Meet the Team
Jared Macarin is an editorial veteran who joined the MarketWatch Guides team after more than 20 years in the newspaper industry. He has written for, edited for or designed more than 50 newspapers across the country, winning numerous awards.
Learn more about Jared Macarin
Ashley Donohoe Contributor
Ashley Donohoe is a personal finance writer, Financial Planning and Wealth Management Professional and Certified Financial Education Instructor based in Cincinnati. She covers banking, loans, investments and taxation, and has written for several prominent personal finance websites. In her spare time, Ashley enjoys playing the piano and spending time in nature.