Venmo does not offer a savings account
Venmo is a payment app, not a bank. It lets you send money to friends and split bills, but it does not hold your money in a savings account with interest. When you add money to Venmo, it sits in a Venmo balance — a holding account that earns zero interest and is meant for spending or sending, not saving.
If you want your money to grow, you need a separate savings account at a bank or credit union. Venmo's balance is a tool for moving money between people, not for storing it long-term.
Key Takeaways
- Venmo balances earn no interest and are designed for short-term holding and peer transfers, not savings.
- Money in your Venmo balance is held by Venmo's banking partner, not insured the way a bank savings account would be.
- You can transfer your Venmo balance to your bank account for free, which takes one to three business days.
- If you want interest on your money, you must open a savings account at a bank, credit union, or online savings platform separate from Venmo.
What Venmo balance actually is
Your Venmo balance is the money sitting in your Venmo account after you add funds or receive payments from others. It is not a bank account — it is a temporary holding space. Venmo uses a partner bank (currently Bancorp Bank) to hold customer balances, but Venmo itself is not a bank and does not offer savings products.
The balance is useful for one thing: paying people or splitting costs without waiting for a bank transfer. Once you have money in Venmo, you can send it instantly to another Venmo user. If you want to move it back to your own bank account, that takes one to three business days and costs nothing.
Because Venmo is not a bank, your balance is not covered by FDIC insurance the way a savings account at a bank would be. Venmo does hold customer funds in a trust account, which offers some protection, but it is not the same may provide.
How to move money out of Venmo if you want to save it
If you decide to save the money in your Venmo balance, you must transfer it to a real savings account first. Open the Venmo app, tap the three horizontal lines (menu), select "Transfer to Bank," and choose your linked bank account. Enter the amount and confirm. The transfer is free and usually lands in your account within one to three business days.
Once the money is in your bank account, you can move it to a savings account at the same bank or a different one. Many online banks offer savings accounts with interest rates that change based on the market — currently ranging from 4% to 5% annually, though this varies. A traditional bank savings account will earn you money; your Venmo balance will not.
Why Venmo does not offer savings accounts
Venmo is built for speed and social payment, not wealth-building. Offering a savings account would require Venmo to become a bank or partner with one in a way that lets customers earn interest. That is not Venmo's business model. The company makes money from transaction fees (when you use a credit card to add funds) and from Venmo Card purchases, not from managing savings.
Banks and credit unions offer savings accounts because they lend out customer deposits and pay you a small share of the interest they earn. Venmo does not do that. Its balance is meant to sit there briefly while you send it to a friend or move it back to your bank.
Other Venmo features that might look like savings
Venmo has rolled out a few features that sound like savings but are not. Venmo Savings, introduced in 2023, is actually a partnership with Varo Bank — a separate online bank. If you use Venmo Savings, your money moves out of Venmo and into a Varo savings account, where it earns interest. This is not Venmo's product; it is Varo's. Venmo is just the middleman.
The Venmo Card is a debit card linked to your Venmo balance. It lets you spend your balance at stores and online, but it does not earn interest or offer rewards. It is simply a way to access the money you already have in Venmo without transferring it to your bank first.
Where to actually save money if you use Venmo
If you use Venmo to split rent or pay friends, you can still save money — just not through Venmo itself. Open a high-yield savings account at an online bank like Marcus, Ally, or Wealthfront. These accounts currently earn 4% to 5% annually (rates change), and you can transfer money from your bank account to savings in minutes.
If you prefer to bank locally, your own bank or credit union likely offers a savings account. The interest rate will be lower than online banks, but you get the benefit of a branch and a familiar institution. Compare rates before you choose — the difference between 0.01% and 4.5% is real money over time.
Some people use Venmo as a checking account substitute — keeping a small balance for weekly bills and friend payments — while keeping most of their money in a savings account elsewhere. That is a reasonable way to use both tools.
Frequently Asked Questions
Is money in my Venmo balance safe?
Venmo holds customer funds in a trust account with a partner bank, which offers some protection. However, it is not FDIC-insured the way a bank savings account is. FDIC insurance covers up to $250,000 per account holder at a bank. If you are keeping large amounts in Venmo, transfer them to a bank account for full protection.
Can I earn interest on my Venmo balance?
No, your Venmo balance earns zero interest. If you want interest, you must move the money to a savings account at a bank or credit union. Venmo Savings is a partnership with Varo Bank, so the interest comes from Varo, not Venmo.
How long does it take to transfer money from Venmo to my bank?
Standard transfers take one to three business days and are free. Venmo also offers instant transfers to your debit card for a small fee (usually $0.25 to $1.25), which land within 30 minutes. Use instant transfer only if you need the money right away.
What happens to my Venmo balance if Venmo shuts down?
Venmo is owned by PayPal and is unlikely to disappear, but if it did, your balance would be returned to you. Venmo is required by law to return customer funds. To be safe, do not keep money in Venmo longer than you need to.
Can I set up automatic transfers from Venmo to savings?
Venmo does not offer automatic transfers to savings accounts. You must manually transfer money from Venmo to your bank account each time. Some people set a weekly reminder to move their Venmo balance to savings as a way to automate the habit.