Venmo does not offer a savings account
Venmo is a peer-to-peer payment app owned by PayPal. It lets you send money to friends, split bills, and request payments — but it does not hold your money in a savings account or pay interest on balances you keep there. Any money sitting in your Venmo account earns zero percent.
Venmo does offer a cash management feature called Venmo Savings, launched in 2023. This is not a savings account in the traditional sense. Instead, it lets you move money from your Venmo balance into a high-yield savings account run by a partner bank. You control the transfer; Venmo does not hold the money itself. The interest rate changes based on market conditions and the partner bank's terms.
If you want your money to earn interest, you must move it out of Venmo into a separate savings account. Venmo Savings makes that transfer easier, but the actual account and the interest come from the bank, not from Venmo.
Key Takeaways
- Venmo's main balance does not earn interest and is meant for short-term peer-to-peer transfers, not savings.
- Venmo Savings lets you move money from your Venmo balance into a partner bank's high-yield savings account with a single tap.
- The interest rate on Venmo Savings depends on the partner bank and current market rates, not on Venmo itself.
- Money in Venmo Savings is held by the bank partner, not by Venmo, and is covered by FDIC insurance up to $250,000 per depositor.
How Venmo Savings works
When you use Venmo Savings, you are transferring money from your Venmo balance to a high-yield savings account. Venmo partners with banks to offer this feature, but you are opening an account with the bank, not with Venmo. The bank holds your money, pays the interest, and provides FDIC protection.
The process is straightforward: open Venmo Savings in the app, link a bank account if you have not already, and move money from your Venmo balance into savings. You can move money back to Venmo whenever you need it, though transfers may take one to two business days. There is no monthly fee for the service.
Interest rates on Venmo Savings vary depending on which bank partner holds your account and what the current rate environment is. Rates change over time and are not may provide. You should check the current rate before moving money in.
What happens to money that stays in Venmo
If you leave money in your main Venmo balance without moving it to Venmo Savings, it earns nothing. Venmo treats your balance as a holding account for payments, not as a place to store money long-term. The balance is not FDIC insured the way a bank account is.
Venmo is regulated as a money transmitter, not a bank. That means your balance is held in trust but does not have the same legal protections as money in a bank savings account. If Venmo were to fail, your money would be returned to you, but the process could take time.
For this reason, most people use Venmo to send and receive money quickly, then move the balance to their personal bank account. If you want to keep money sitting somewhere and earn interest, Venmo Savings or a traditional bank savings account is the better choice.
Comparing Venmo Savings to a traditional bank savings account
The main difference is where the money lives. With Venmo Savings, you move money from Venmo into a bank account through the app. With a traditional savings account, you open the account directly with the bank and transfer money from your checking account or employer deposit.
Interest rates on Venmo Savings and high-yield savings accounts at online banks are often similar, since both are competing for the same market. The advantage of Venmo Savings is convenience if you already use Venmo regularly — you can move money to savings without leaving the app. The disadvantage is an extra step: you have to transfer from Venmo to savings, rather than moving money directly from your paycheck or checking account.
Both Venmo Savings and traditional bank savings accounts offer FDIC insurance up to $250,000 per depositor. Both allow you to withdraw money, though transfers may take a business day or two. The choice depends on whether the convenience of staying in the Venmo app matters to you.
When to use Venmo Savings versus keeping money in Venmo
Use Venmo Savings if you regularly receive money through Venmo and want that money to earn interest while you decide what to do with it. Moving money to Venmo Savings takes seconds and keeps your balance organized: money you are about to spend stays in Venmo, money you are saving moves to the savings account.
Keep money in your main Venmo balance only if you plan to spend it within days or weeks. Since it earns no interest, there is no reason to let it sit there longer. If you receive a payment and know you will not need it for a month or more, move it to Venmo Savings or transfer it to your personal bank account.
If you do not use Venmo often, a traditional savings account at your bank or an online bank may be simpler. You avoid the extra step of moving money from Venmo, and you can set up automatic transfers from your paycheck or checking account.
How to move money between Venmo and Venmo Savings
Open the Venmo app and look for the Venmo Savings option in the menu. Tap it, then select "Move to Savings" to transfer money from your Venmo balance to the savings account. You will see the current interest rate and the bank partner's name. Confirm the amount and complete the transfer.
To move money back from savings to Venmo, open Venmo Savings and select "Move to Venmo." The money will return to your Venmo balance within one to two business days. There is no fee for either transfer.
If you want to move money from Venmo Savings to your personal bank account, you will need to go through your bank's app or website, since the money is held by the bank partner, not by Venmo. Check your bank's transfer options to see how long it takes.
Frequently Asked Questions
Is money in Venmo Savings insured?
Yes. Money in Venmo Savings is held by a bank partner and covered by FDIC insurance up to $250,000 per depositor. Money in your main Venmo balance is not FDIC insured, though Venmo holds it in trust and would return it to you if the company failed.
Can I access my Venmo Savings money anytime?
Yes, but transfers take one to two business days. Move money from Venmo Savings back to your Venmo balance whenever you need it, then spend it or transfer it to your bank. There is no limit on how often you can move money or how much you can transfer.
What interest rate does Venmo Savings pay?
The rate varies depending on the bank partner and current market conditions. Check the Venmo app for the current rate before you move money in. Rates change over time and are not may provide to stay the same.
Do I need a separate bank account to use Venmo Savings?
You need a bank account linked to Venmo, but not necessarily a separate one. You can link your existing checking account. Venmo Savings itself is a separate account held by the bank partner, but you do not need to open anything outside the Venmo app.
What happens if I close my Venmo account?
If you close Venmo, you will need to move money out of Venmo Savings to your personal bank account. The bank partner will not close your savings account automatically; you control when and how to withdraw the money.