So you just fell in love with this popular peer-to-peer payment service.
And since it's been helping you complete most of your financial transactions, you've probably found it convenient over banks.
For sure, Venmo lets you do what you'd typically do with your bank—more flexibly and conveniently—but is Venmo a checking or savings account? Obviously, you should be asking yourself that question.
In this article, we'll see whether Venmo is a checking or a savings account.
Is Venmo A Checking Or Savings Account?
Before heading forth, I'd like you to keep in mind that Venmo is a digital payment service—not a bank. So you shouldn't expect Venmo to behave as one and offer checking or savings accounts to customers.
However, to answer the question more straightforwardly, Venmo is more of a checking account than a savings account.
Let me explain why.
Let's say a checking account typically lets you spend money, transfer money, receive direct deposits, and even cash checks among others. Venmo typically lets you do all of these more conveniently and flexibly.
Venmo, however, does not offer features you should expect with a savings account—there's no interest rate on the funds you store in your Venmo balance. Keeping funds in your Venmo balance will only tempt you to use it for your transactions.
Most banks nowadays are FDIC-insured. While Venmo isn't a bank, this is one feature you should love about the digital payment giant.
If you're an eligible Venmo customer, your funds will be backed up by its FDIC pass-through insurance. In this case, Venmo typically stores funds owned by eligible members in custodial accounts they have at Program Banks. Your funds are insured by the FDIC up to $250,000 in case the bank holding your custodial account fails.
Also Read: Is Cash App A Checking Or Savings Account
Can I Use Venmo As A Savings Account?
No, you cannot use Venmo as a savings account. If you have money in your account, you won't be earning any interest from it.
Is Venmo Good for Saving Money?
No, Venmo is not good for saving money. Unlike Cash App which offers a savings option, Venmo does not offer an option that lets you save money.
You won't earn interest over the money you save and you might not be eligible for Venmo's FDIC pass-through insurance.
And of course, saving money with digital payment services isn't always a good idea and I recommend saving your funds with a regular savings account you own at a bank.
Does Venmo Go Directly into your Checking Account?
No, the money you receive on Venmo does not go directly to your linked checking account. When someone sends you money on Venmo, it first goes to your Venmo balance. From there you can transfer the funds to your checking account when needed.
Do You Need A Bank Account For Venmo?
No, you don't necessarily need a bank account for Venmo. You can use Venmo with your debit card. However, you'll need to link your bank account to Venmo if you need to access more features including direct deposits.
What Type of Bank Does Venmo Use?
Venmo uses The Bancorp Bank to offer most of its financial services including the Venmo debit card.
Does Venmo Have a Routing and Account Number?
Yes, Venmo does have a routing and account number, which you can use to receive direct deposits on your Venmo account. You can find these numbers by navigating to Settings, and then tapping Direct Deposit in the Venmo app.
Venmo is a popular payment service that allows users to send and receive money safely and conveniently.
Yes, it is a payment service—not a bank.
While Venmo is not a bank itself, it partners with some banking partners to offer customers more of a checking account features they typically find within the app.
Saving money with Venmo isn't a superb idea—you won't earn interest and there's no guarantee that your funds will be FDIC-insured. So consider saving your funds with an established bank.