Yes, you can connect a savings account to PayPal, but PayPal works better with checking accounts
PayPal accepts both savings and checking accounts, but the connection process and how you use the account differ. When you link a savings account, PayPal can pull money from it to cover payments or send money to other people. However, most people use checking accounts instead because PayPal transfers happen instantly with a checking account, while savings account transfers may take longer and could trigger withdrawal limits your bank has set.
The link itself takes about five to seven business days to verify. PayPal deposits two small amounts (usually under $1 each) into your savings account, and you confirm the exact amounts in your PayPal settings to prove you own the account. Once verified, your savings account appears as a funding source whenever you send money or make a purchase through PayPal.
Before you connect a savings account, check whether your bank limits how many withdrawals you can make per month. Federal rules once capped savings account withdrawals at six per month, but that rule changed in 2020. Your specific bank may still enforce its own limit, and each PayPal transfer counts as one withdrawal. If you plan to use PayPal frequently, a checking account avoids this problem entirely.
Key Takeaways
- PayPal accepts savings accounts as a funding source, but transfers from savings accounts may be slower than transfers from checking accounts.
- Verification takes five to seven business days and requires you to confirm two small deposits PayPal makes to your account.
- Check your bank's withdrawal limits before connecting a savings account, because each PayPal transfer counts as one withdrawal.
- If you use PayPal regularly, a checking account is usually more practical because transfers post faster and withdrawal limits do not apply.
How to add a savings account to PayPal
Log into your PayPal account on a computer or the PayPal app. Go to Wallet, then select Link a bank account. Choose Savings Account from the account type menu. Enter your bank's routing number, your account number, and confirm the account type again.
PayPal will then ask you to verify your identity by entering your full name, date of birth, and the last four digits of your Social Security number. This step protects both you and PayPal by confirming you own the account. After you submit this information, PayPal deposits two small amounts into your savings account within one to two business days.
Once the deposits arrive, return to your PayPal wallet and select the account you just added. Enter the exact dollar amounts of the two deposits (for example, $0.23 and $0.17). PayPal confirms the amounts match and marks your account as verified. You can now use this savings account to fund PayPal payments, send money to friends, or withdraw PayPal balance to the account.
When a savings account works well with PayPal
A savings account makes sense if you keep most of your money in savings and only move it to PayPal occasionally. Each transfer counts as a withdrawal, so if you send money through PayPal once or twice a month, you will stay well within most banks' limits. You also avoid keeping a large balance in a checking account, which typically earns little or no interest.
A savings account also works if you want PayPal to be a backup funding source. You can link both a checking account and a savings account to the same PayPal account. If your checking account runs low, PayPal will pull from your savings account instead. This setup gives you a safety net without having to manually transfer money between accounts.
When a checking account is the better choice
Use a checking account if you send money through PayPal more than a few times per month. Checking accounts have no federal withdrawal limits, and transfers from checking accounts post to PayPal instantly or within hours. Savings accounts may take one to three business days, which matters if you need the money to arrive quickly.
A checking account also avoids the risk of hitting your bank's withdrawal limit unexpectedly. Some banks allow six withdrawals per month from savings accounts, while others allow more or fewer. If you lose track of how many PayPal transfers you have made, you could trigger a fee or have a transfer rejected. Checking accounts eliminate this problem.
If you use PayPal for regular bills or frequent peer-to-peer transfers, link your checking account as your primary funding source. You can still link a savings account as a backup if you want one.
What happens if your savings account has withdrawal limits
If your bank enforces a withdrawal limit and you exceed it, PayPal's transfer will fail. Your payment or money send will be declined, and PayPal will ask you to choose a different funding source. You will not be charged a fee by PayPal, but your bank may charge a fee for the failed withdrawal attempt, depending on its policies.
To avoid this, count how many times you have withdrawn from your savings account in the current month before making a PayPal transfer. If you are close to your limit, use a checking account or PayPal balance instead. You can also contact your bank to ask whether it allows you to increase your withdrawal limit or remove it entirely.
Removing or replacing a linked savings account
To stop using a savings account with PayPal, go to Wallet, find the account, and select Remove. PayPal will no longer pull money from that account. If you have already set it as your primary funding source, PayPal will prompt you to choose a different account before you can remove it.
Removing an account does not affect any money already in your PayPal balance or any pending transfers. If you want to replace the savings account with a checking account, add the checking account first, set it as your primary funding source, and then remove the savings account. This order prevents PayPal from blocking your payments while you make the switch.
Frequently Asked Questions
How long does it take to verify a savings account with PayPal?
The two verification deposits arrive within one to two business days. Once they arrive, you enter the amounts in PayPal, and verification is instant. The entire process usually takes three to five business days from start to finish.
Can I use a savings account to receive money on PayPal?
Yes. When someone sends you money through PayPal, you can withdraw it to your linked savings account. The transfer takes one to three business days, depending on your bank and whether it is a business day.
What if PayPal's verification deposits do not arrive?
Check your bank account to confirm the deposits posted. If they did not arrive after three business days, contact your bank to confirm the routing and account numbers are correct. If the numbers are wrong, remove the account from PayPal and add it again with the correct information.
Can I link multiple savings accounts to one PayPal account?
Yes. You can link as many bank accounts as you want, including multiple savings accounts. PayPal will ask you to choose which one to use each time you make a payment, or you can set one as your default funding source.
Does PayPal charge a fee to link a savings account?
No. Linking a bank account is free. PayPal does not charge for transfers to or from a linked savings account, though your bank may charge its own fees depending on your account type and the number of transfers you make.