PayPal as a savings account?

[Nissi]

Trying to save money for November's trip to WDW (estimated about $2410) and keeping money in my bank's saving account is not a great way for me to save......it can be sooo easy to use my savings during the week when a need arises.

Occasionally, I will sell something on eBay and I get deposits made into my PayPal account. Also as a part time mystery shopper (not my fulltime job), I get occasional small deposits. I can also transfer funds from my bank into PayPal if I choose to. Would you say this is a reliable and safe way to save money? I want to save for the next 6 months.The good thing about PayPal is that the funds are not immediately available to me...there is a 3 day wait for the transfer to complete if I chose to put money in my bank account from my PayPal account.

 

[BrettS]

It's an interesting thought and I would think that paypal would be reasonably safe, but it certainly doesn't have all of the safeguards that a regular bank has... if paypal were to fail for some reason you may lose your money, and I'm not sure how much protection you would have if someone got into your account there or something, but the likleyhood of those happening are reasonably low.

There is also the disadvantage of that account not earning any interest, but frankly, the interest rates on most short term savings accounts are so low right now that you're not really losing much there either.

If you're just concerned about not being able to access your money immediately then I might suggest one of the online savings account... ING Direct or HSBC direct or one of those. Those banks will allow you to access your money immediately with a debit card, but you can ask not to get a debit card (or just destroy it when you get it) and transfer money through their websites (it works similar to how you transfer money from paypal, including the 3 day delay).

That will earn a bit of interest and also give you all the protection you get from putting your money in a real bank, yet still limit your access to your money.

 

[amylynne01]

Right now, I'm saving money for a trip in January, and I have all that money at an online bank (Capital One). If you're going to save up for a few months, I would find an account that will make you some money. I think I just saw in paypal that you make 0.07%! Check out money market accounts that will make a bit more.

I think it also comes down to willpower. You have to just not spend it. Easier said than done.

 

[rflorek]

I wouldn't do it. I don't leave Paypal money in there any longer than I have to. You would probably be better off looking into an online savings account - ING, for example.

 

[Nissi]

Thanks everyone...I think I will look into an online savings account today!

 

[JB2K]

It's an interesting thought and I would think that paypal would be reasonably safe, but it certainly doesn't have all of the safeguards that a regular bank has... if paypal were to fail for some reason you may lose your money, and I'm not sure how much protection you would have if someone got into your account there or something, but the likleyhood of those happening are reasonably low.

As PayPal is owned by eBay, the chances of it failing are pretty slim.

However, although PayPal is not a traditional bank, they are licensed by individual states to operate as a money transmitter, so you do have an avenue of recourse, should something go wrong.

My advice -- if OP does not have an account at Chase, why not open one there just as a place to stash your Disney money (and you can access it with a Chase debit card anywhere on Disney property, without having to use your home bank).

 

[extremesoccermom]

I don't leave any money in Paypal. I have had issues before. I would use an online savings account. We use INGdirect and earn interest. I have saving, checking, and cd with them for different saving purposes.

 

[jessica52877]

I don't leave money in my paypal account either. The possibility of too many things that could go wrong.

I agree with ING or the like.

 

[purplegirl247]

My PayPal account got hacked last month. Luckily, they were great, determined the issue before I was even aware of it, and returned my money, but it made me really nervous. I don't even keep any money in there; the person just charged $200 and it was taken directly from my checking account. For that reason alone, I'm with everyone else on other options beside PayPal.

 

[LisaInNc]

I would not use Paypal as a savings account.

Lisa

 

[jstbcuz]

I have ING and love it. We have so much direct deposited out of every check and we never see it.........therefore we dont miss it.

 

[hoffmann2828]

I second the ING suggestion!!!

I absolutely LOVE ING!!! I set my paypal/ING up like this:

Paypal is linked to Account A.

When it gets transferred into Account A, I transfer it to Account B.

Account B is really my savings account.

I do this just in case someone tries to reverse, hacks, etc. There is never any money in Paypal or Account A. It is in a separate Account (B) that neither of them can touch.

Jenny