Should You Use Cash App To Hold Your Money?

Cash App
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In recent decades, peer-to-peer payment services have grown in popularity. In fact, 76% of Americans have used a P2P service to send or receive money between family and friends. Of those, 26% have used Cash App, a financial services company that offers more than just P2P payment capabilities.

Cash App currently has more than 50 million active users. But is Cash App FDIC insured and safe to keep your money in? Keep reading to find out.

Can You Use Cash App as a Bank Account?

With services like direct deposit and a Visa debit card, you can use Cash App as a bank account. You don’t need a bank account to open a Cash App account, since you can fund your account through direct deposit paychecks, tax returns or through cash deposits at select retailers across the U.S.

Cash App accepts direct deposits and offers a routing number and account number just like a bank. Your Cash Card is also accepted anywhere that takes Visa. You can add your Cash Card to mobile wallets like Apple Pay and Google Pay for added convenience.

Unlike some banks, Cash App has no monthly fees and no overdraft fees. However, Cash App lacks some of the features of traditional or online banks, such as:

  • Interest-earning checking or savings accounts
  • Money markets or CDs
  • Relationship banking for customers with higher balances
  • Check-writing capabilities

Plus, it’s important to note that Cash App, on its own, is not insured by the Federal Deposit Insurance Company.

Is Cash App FDIC Insured?

If you have a Cash Card, the money you hold in your Cash App account is FDIC insured for up to $250,000 per account holder through Cash Card’s partner banks. Cash App indicates that its Visa debit card services are provided through Sutton Bank. Other sources indicate that direct deposit services are provided through Lincoln Savings Bank.

Make Your Money Work Better for You

If you don’t have a Cash Card, it’s important to recognize that your money held in Cash App is not FDIC insured. If Cash App goes out of business, you could lose any money in the account.

Funds stored on your Cash Card are FDIC-insured through Cash App’s partner banks by what is called “pass-through” insurance. The Consumer Financial Protection Bureau, however, warns against using these payment apps that have pass-through insurance as a bank.

Pass-through insurance covers your deposits up to legally allowable limits if the bank affiliated with the app fails — not if the app itself fails or goes bankrupt. “It doesn’t insure you against the failure of the payment app company. This means there could be a risk of losing your money in the event the company fails,” the CFPB said.

Good To Know

If the payment app company fails, your money still may be protected through the bank that is insuring it, according to the CFPB. But, there could be delays in accessing your money. For unbanked individuals who rely on Cash App for all their financial needs, not being able to access money to pay bills or buy food could be catastrophic.

It’s safer to keep the money you’ll need immediately in Cash App, or on your Cash App card, and transfer additional funds to an FDIC-insured bank.

Is Cash App Safe To Keep Money In? 

There’s more to keeping your money safe than just FDIC insurance in the unlikely event of a bank failure.

Make Your Money Work Better for You

It’s worth noting that FDIC insurance does not cover losses due to fraud. On its website, Cash App says it uses cutting-edge encryption and fraud detection technology to keep your data and money secure.

Cash App also monitors accounts for “anything out of the ordinary.” Cash App will cancel potentially fraudulent payments and return funds to your Cash App or linked bank account. You can expect the funds either instantly or within 1 to 3 business days.

The Cash Card uses chip and NFT technology for transactions. This allows users to avoid magnetic stripe purchases, which can be prone to fraud.

Bottom Line — Should You Use Cash App To Hold Your Money?

Cash App is convenient and does offer some of the same services as a bank but it does not replace a traditional or online bank with FDIC insurance. If you are looking to keep your money in a safer place, you might consider a free checking account with no minimum balance requirements if you are opening a bank account for the first time.


Here are the answers to some of the most frequently asked questions about Cash App.
  • What is Cash App?
    • Cash App is not a bank. It's a financial technology company that partners with banks to provide certain services, such as direct deposit and a debit card. Cash App is best known as a mobile payment app that offers customized Visa debit cards and free withdrawals at any MoneyPass ATM.
  • What are the disadvantages of Cash App?
    • Cash App may take the place of a bank for many people, but it does not provide paper checks, it doesn't pay interest or have a linked savings account. In addition, funds kept in your account may not be FDIC insured unless you have a Cash Card.
  • What bank is Cash App under?
    • Cash App uses Sutton Bank for Visa debit card services and Lincoln Savings Bank for direct deposit services.
Make Your Money Work Better for You

Information is accurate as of June 27, 2023. 

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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