Comments on: Better Place To Keep Your Funds – Paypal OR Bank

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By: John

John — Fri, 10 Jul 2009 16:37:21 +0000

I don’t know about hacking, but in the end it’s all “electronic money” on their site. I’m sure whatever might happen could be tracked / recovered. But beyond that, money kept in your regular Paypal account IS eligible for pass-through FDIC insurance coverage as it is kept in banks. However if you opt to put your money in their Money Market Fund, that money is NOT covered.

“As of June 30, 2008, your PayPal U.S. Dollar balances are held at the following institutions: Bank of America, N.A., Citibank, N.A., HSBC Bank USA, N.A., RBS Citizens Bank, N.A. and Wells Fargo Bank, N.A.”

See the “information about FDIC pass-through insurance” link on the bottom of their site. I’d link to it, but you have to be logged in to see it anyway.

By: Ozie Jackson

Ozie Jackson — Fri, 10 Jul 2009 16:28:36 +0000

The most important reason to keep the vast majority of your money in the bank to me is the FDIC insurance. Paypal offers no such protection in the event of some hacking disaster.

By: Kumaran

Kumaran — Fri, 10 Jul 2009 03:52:32 +0000

@Mike
I agree.

@Francois
I feel funding your account from Bank or using Balance funds is same atleast in US. You can make a Paypal Masspay using both Bank funds and Balance funds. So in that sense i don’t see why you shouldn’t move the funds to Bank. In some countries like India, there is a charge(but very small) for moving the funds to your bank and also the exchange rate comes into picture. Still i feel its all worth the effort, if you want to be safe. Especially the ones who got stung by Paypal like me would like to “Be Safe than Sorry”, but the intent is to throw some light for those who are lucky to not have got stung. Yes, “large funds” differ from one person to another. As a general rule at the most, till now i didn’t have anything more than low $XXXX in Paypal.

@John
Yes i do it the same way when i get large funds. Banks do pay a bit and really depends on the country.

By: John

John — Fri, 10 Jul 2009 01:58:03 +0000

I transfer most of my Paypal funds to my bank account when I get large payments, but I always try to leave a few hundred to spend on sites and subscriptions for those places that don’t take anything but Paypal. Also, I have their debit card which, at least here in the US, pays you 1% cash back when you use it as a Mastercard, as opposed to a debit card (which it really is) and enter your pin number.

But Paypal also offers some sort of money market account or something which I’ve never used. It doesn’t pay much, but what bank does these days? The bottom line is you CAN get some sort of interest from Paypal.

By: Francois

Francois — Thu, 09 Jul 2009 13:39:59 +0000

And I forgot about the last not the least: LAZY (like the title of your blog).
It’s annoying and takes time to have to be taking care the Paypal account run under “low” funds.

By: Francois

Francois — Thu, 09 Jul 2009 13:35:42 +0000

What you say above is true but it’s pleasant to can pay immediately to make a fast purchase.
Plus I don’t remember if PayPal charge you when you withdraw to your bank and/or when later your feed your account because you need money.
I also think that sometimes people only accept Paypal payment if you have the money into your account (don’t ask me the reason).
Finally some people having personal accounts think it’s a way to make buisness “anonymously”.

So probably all is about the personal definition of “large funds”.

By: Mike

Mike — Thu, 09 Jul 2009 07:45:00 +0000

True! Bank is always safer than Paypal. I can feel the tension till the fund from Paypal gets transferred to my bank account! - Mike