Cash App Pros and Cons — Find A Better Bank (2024)

FAQs

Should I use Cash App instead of a bank? ›

Deposits Not Insured

All deposits held at U.S. banks are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. By contrast, the balance of your Cash App account is not covered by the FDIC unless you also have a Cash App debit card, which is backed by the company's own partner banks.

Banking services and FDIC Insurance provided by Cash App's bank partner(s). With a Cash App Card, your funds are FDIC-insured through our partner banks, Wells Fargo Bank, N.A. and Sutton Bank, Members FDIC, for up to $250,000 per person. Prepaid debit cards issued by Sutton Bank, Member FDIC. Learn more.

One of the biggest disadvantages of Cash App is that you are limited to sending and receiving up to $1,000 during the first 30 days on the app. After that, you can have your limit raised. However, if you are looking to perform major transactions early on, you may have to use another app.

Cash App is a financial services platform, not a bank. Banking services are provided by Cash App's bank partner(s).

The short answer: no.

In particular, the Consumer Financial Protection Bureau (CFPB) warns consumers that storing cash in apps like PayPal, Cash App, and Venmo is a habit you should avoid.

Cash App uses cutting-edge encryption and fraud detection technology to make sure your data and money is secure. Any information you submit is encrypted and sent to our servers securely, regardless of whether you're using a public or private Wi-Fi connection or data service (3G, 4G, or EDGE).

Who is the owner of Cash App? Cash App is fully owned by Block, which launched the payment app, originally Square Cash, as its own competitor to peer-to-peer payment apps like Venmo and PayPal. It became known as Cash App soon after that. Cash App was once a secondary business for Block, just behind Square.

Savings with Cash App. Savings provides a separate place to store your money and save with Cash App. You can set goals and add funds to your savings balance from your Cash App balance, or from a linked payment source. Cash App's savings balance does not have a separate account number like traditional banks.

If your Cash App Balance incurs any negative balance (such as from a chargeback that exceeds the funds available in your Cash App Balance), your Savings Balance will be automatically added back to your Cash App Balance to offset the negative balance incurred.

The app's parent company, Block, recently agreed to a $15 million class-action settlement. The lawsuit alleges Block and Cash App were “negligent” in two separate incidents involving user data and account access.

What are the flaws of Cash App? ›

Cash App has some flaws such as closing a lot of accounts even when transactions are not suspicious. Also, you cannot send money to a friend if you havent sent them money in the past. Also, security system of cash app is not very strong as scammers use cashapp to steal money from others.

The Cash App Prepaid Card is provided through a partnership with Sutton Bank. Wells Fargo Bank provides FDIC insurance for the Cash App Card. Lincoln Savings Bank provides Cash App's banking products.

Cash App supports debit and credit cards from Visa, MasterCard, American Express, and Discover. Most prepaid cards are also supported. ATM cards, Paypal, and business debit cards are not supported at this time.

Keep in mind that you can only have one bank account and one debit card connected to your Cash App account.

Before you start investing for longer-term goals, it's important to have an emergency fund with around three to six months' worth of expenses. Keeping these in a checking, savings, or MMA is best because these accounts are liquid.

The Cash App Savings option is a no-fee high-yield savings account that earns 4.50% APY with qualifying direct deposits of $300 or more per month. Otherwise, your APY drops to a mere 1.50%. To get the higher APY, you also must apply for the Cash Card, Cash App's free Visa debit card issued by Sutton Bank.

Cash App is safe to use, although you'll need to keep your account details safe and secure, as with any account product⁵. Generally, using a direct deposit to get paid by your employer or any other regular payer is much safer than the alternatives of getting a check or being paid in cash.

Cash App is a great way to move money from your bank account to a card so you don't have to put your debit/credit card numbers everywhere. This helps to cut down on the stealing of credit card numbers and fraud.