1. Your Venmo balance doesn’t earn interest
Unlike money in your investments or savings account, your Venmo balance isn’t working for you. Rather than increasing in value over time, your balance remains the same no matter how long you keep it in the app.
Instead, putting that money into a high-yield savings account will allow it to grow. High-yield accounts currently offer rates as high as 0.6% APY.
2. Your Venmo balance isn’t insured
Unlike your bank account, your Venmo balance isn’t insured by the Federal Deposit Insurance Corp. If your bank were to go under, the government insures up to $250,000. But Venmo has no such guarantees.
That means that in the unlikely event that the service goes down, Venmo isn’t responsible for you getting back whatever funds you had sitting in your account.
It’s smarter to minimize your risk by not leaving any significant sums of money in the app.
3. Venmo transfers take time
Because Venmo reviews all of its transfers, you could be left unable to pay a bill because your funds are stuck in limbo.
Venmo says transfers typically arrive to user bank accounts within one to three days, but warns that reviews may cause delays. If rent is due and you don’t have access to your funds, that could be a big problem.
While it may be convenient to keep some cash in Venmo for quick transfers, keep the majority money safe and working for you.
We recommend using our Mobile Banking App and signing up for eStatements to better protect and monitor your information.
Read the full article here: CNBC
Published Tue, Jun 29 20219:41 AM EDT Updated Tue, Jun 29 20211:29 PM EDT
Nicolas Vega
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