What I Like About Cash App Savings

If there is something about banking services in this generation, some are built to make life easy for young working class adults. You know these ones by the interest rate they offer on their savings accounts. Cash App, a financial tech we use almost everyday, offers high interest rates. Cash App savings account ranks up there with some of the best high-yield interest savings accounts right now.

Oh yeah.

I am sure not everyone using Cash App knows this fact. This is because the fin tech is usually used for peer to peer transactions. But, the best part of the app is it can be used to save money.

You get rates more than 2.5% times what a traditional bank will offer you on a traditional savings account. On this article, I am going to talk to you about Cash App savings. Also, how you could qualify for it and maximize interest rates. Simply put, I am going to work you through setting it up.

The Cash App Interest Rates

Cash App offers two kinds of interest rates on its savings. The first one is 1.5% on savings. We earn 1.5% on our savings, when you provide our tax information on Cash App. By tax information, I refer to our social security numbers. This is a normal requirement for all American financial institutions transaction with us.

From my experience, the 1.5% interest rate is initial baseline until you meet some requirements which will bump it up to 3.25%. Later, I will be discussing about the requirements to bump your Cash App savings rate from 1.5% to 3.5%.

Having said that, the Cash App savings interest rate is an annual percentage yield. What do I mean by this, my good reader?

I do not know how much you know about interest rates, but I will simplify it here for you. Annual percentage yield is the percentage return per year on your savings or any investment. Let me elaborate with an example.

Let us say we decide to save $2000 with Cash App at 1.5% APY, the money will earn $2.50 per month. At the end of the year, the annual percentage yield on $2000 at 1.5% is $30. Now assuming we get 3.25% APY, the same $2000 will be $65.

I got the above numbers by multiplying the Cash App savings APY with the savings amount and divide the answer by 100. It gives you the annual percentage yield. Do you understand how that works now?

How Cash App Savings Interest Works

Cash App savings interest changes whenever the Fed rate changes. What it is now, depends on the current Fed rate. Once it changes, it will change with it.

On February 2024, the interest rate on Cash App savings was all the way to 4.5%. Today, we get 1.5% and could earn up to 3.25% when we meet certain eligibility.

Furthermore, our savings with Cash grow through interest accruement and principal compounding. What does mean for us?

It means interest is accrued on the savings daily. Then, Cash App adds the accrued interest on the initial savings account (principal). Hence, compounding the principal amount since it increases a bit depending on how much we put in the savings.

Earlier on, I mentioned how your Cash App balance is not the same as your savings. Now, I am going to walk you through how you could set up your Cash App savings. This is since it is separated from your balance in your account.

Where Is Savings On Cash App?

So, how do I transfer money to Cash App savings?

When I first saved with Cash App, I did the following below to set up my savings on the fin tech.

• Login to Cash App
• Tap on the $money on the bottom left of the app.
• Scroll down until you see Savings. Tap on it.
• Tap on Add money to transfer money from either your Cash App balance or a linked debit card to your savings.
• Also, you can tap on Set a goal. Pick an emoji which fits the goal of savings. I like there are a lot of emojis which fits what the reason behind why we are trying to save. It makes the whole experience fun.
• Describe your goal. Tap on Set goal.
• On the next page, put how much you want to save. Our goal is now set to the amount we want to save.

Whenever you want to add money to that particular goal, all you have to do is go to the goal and tap on Add money to move money towards your savings goal. You can always update the goal.

How To Automate Your Cash Savings

One of the things I like which Cash App got right with its savings, is it can be set to automatically save on your behalf. Now, I have a lot of savings accounts. Most do not allow you to set automated savings the way Cash App does it.

How does Cash App let us automate our savings?

Under its savings section, we automatically grow our saving contributions by either saving spare change of transactions or save a part of our paycheck. Simply put, you can either set aside your Round-ups or a part of each paycheck coming in. This is especially, when you set up a Cash App direct deposit.

Here is how you could set these two ups, so you can automatically contribute to your savings goals without manually going in there to do.

• Login to Cash App.
• Tap on $money icon below.
• Scroll down until you see Savings. Tap on it.
• Scroll down until you see Round Ups and Paychecks under Grow your savings. If you want to use the Round Ups, tap on it to turn it on. With the Paychecks, it is a little different.
• Tap on Paychecks. You will be asked which savings goals you want the money from your paycheck going to. Tap on Continue.
• On the next page, select on the percentage of paycheck you want to going to the saving goal. Tap on Confirm.

Every pay day, the percentage you select for deductions will go into the savings goal. This is especially, when you have set up a direct deposit with Cash App. I wrote a guide on this. It is the blue highlighted guide I mentioned above.

How To Earn Higher Interest On Cash App Savings

Besides the initial 1.5% we start out with whenever we set up savings on Cash App, we can earn 3.25% annual percentage yield. As I mentioned earlier, you need to meet some eligibility. If you have used Cash App as long as I have, you probably already meet these requirements.

Here is what I want you to know about earning a higher interest rate than the initial 1.5% APY on savings.

• Qualify for Cash App green status.

Not sure what you know about the green status. But a while ago on a guide, Is Cash App Green Worth It, I mentioned how this status opens the best features on Cash App for us. I will be reiterating it again on here.

Well, you just need to spend about $500 or monthly on Cash App to qualify for it. If you do not want to spend that amount monthly on Cash App, you can just set up a direct deposit. As long as you receive $300 monthly through your Cash App direct deposit, your green status will be active.

But yeah, this is how you earn a 3.25% on savings interest rate. As long as you have green status, you will be earning the highest Cash App savings rate available. If you ask me, it still beats the national average of 0.46% interest rate most traditional banks in the United States offer to us.

Is Cash App Savings Safe?

Is it good to put money in savings on Cash App?

Absolutely. Cash App is a good place to have a savings account. This is because it is a secure fin tech. Not only a secure fin tech, but also we are eligible for the FDIC pass-through insurance up to $250,000. But, it requires us having a cash card.

If you do not have a Cash App card, I have a guide on how to get a Cash App card. Otherwise, your money is safe with Cash App savings. The fin tech does billions of dollars a year on transactions, so trust me when I say your savings are well protected.

Alternatives To Cash App Savings Account

In as much as I like the feature on Cash App, there are online banks who offer attractive interest rate with good banking services. My favorite is SoFi bank. I am currently using it to save up to pay off my car loan debt.

Currently, you can earn up to 3.80% on its savings account. This is when you set up a direct deposit. But, here is why I am recommending it to you.

You get a $50 cash upon opening an account and depositing $500 with the online bank within 21 days. If you decide to enroll on SoFi Plus, you get an extra $25. When you set up a direct deposit with a deposit of $5000 within 21 days, you get a $400 bonus. Altogether, you get $475 in total.

To conclude this article, I feel like Cash App rank up there with other high yield interest rate. 3.25% rate on savings is not bad at all, when we look at a traditional bank’s interest rate on savings account. If you are going to save money, you might as well use Cash App.