Paypal Prepaid 5% APY On Up To $5,000

We’ve written about a few different options for high-interest savings accounts. Often times, these come from savings accounts attached to a prepaid card. Here we’ll discuss the Paypal Prepaid option.

  • Interest Rate: 5% APY
  • Minimum Balance: None
  • Maximum Balance: $5,000 (drops to 0.50% APY if over this balance)
  • Availability: Nationwide
  • Direct deposit required: No
  • Additional requirements: Must have Paypal account
  • Hard/soft pull: Soft
  • Credit card funding: No
  • Monthly fees: $4.95
  • Insured: FDIC
  • Length of promotion: Unknown

The Offer

Direct Link

  • Open a Paypal Prepaid Mastercard account and you’ll be eligible to open a Savings account with 5% APY on up to $5000

Update 5/31/16: Netpsend is lowering the 5% rate to apply on just $1,000, effective July 1, 2016. This will probably effect this Paypal card too.

Avoiding Fees

You can apply for the card online with no fees. (Or you can buy a temporary card at many locations which usually comes with a $4.95 fee.)

The card does come with a regular monthly  fee of $4.95 (non-waivable).

There are also a couple of other fees to be aware of, mainly a $1.95 ATM withdrawal fee and a $5.95 replacement card fee. (See all fees at the end of this PDF.) There is no fee for balance inquiry online or by phone.

Add Money

There are three ways to add funds to your Paypal Prepaid account.

  • Direct deposit the funds. Sending money via ACH transfer from another checking account will work as well. (1)
  • Transfer funds from your Paypal account. Up to $300 per day and $2000 per rolling 30-days. First get the money into the Paypal account, then transfer it from there in $300 increments to the Prepaid card.
  • You can add cash at a reload center. Fees may apply.

You can not add money to the savings account directly. First add money to the Prepaid card using one of the above methods, then transfer the funds to the linked savings account.

Taking Money Out

To get money out of the account, first transfer it from the savings to the Prepaid card, then you’ll be able to transfer it to your Paypal account. From there the funds can be transferred to your bank. (1)

Rewards and Referral Program

  • Like many similar prepaid cards, the Paypal Prepaid has a referral program which gives each of them a $5 reward when the new member enrolls and adds at least $10. (Feel free to add your referral links in the comments, but please add some pertinent information about the topic as well.) If the referred individual had a Paypal Prepaid or any other Netspend Prepaid within the past 180 days, they are not eligible for the referral bonus.
  • Based on your shopping activity, Paypal will target you with offers for various merchants. Since most of us will just be opening the account for the 5% savings rate and won’t be using the debit card, we probably won’t get much out of this.

Our Verdict

After accounting for the $4.95 monthly fee, the actual interest earned is around 3.8%. That’s much better than the standard interest rates offered these days and could be a worthwhile option.

Some people are afraid to trust Paypal with their money. These accounts are FDIC insured so you should be safe, at least in the long run.

There are other options for high-interest Prepaid cards as well, such as the Control card which we’ve written about. Both the Control card and the Paypal card are Netspend Prepaid clones and work similarly.

See Netspend 5% Savings Accounts on up to $5000 for a look at the other Netspend options.

See Guide to 5% Interest Prepaid/Savings Accounts for a full roundup of all 5% prepaid/savings options.

63
Leave a Reply

avatar
 

  Subscribe  
newest oldest most voted
Notify of
L. Hayze
L. Hayze

Since it’s FDIC insured your money is safe in the long run, but only in the LONG run! They’ve had multiple worldwide outages affecting the ability to transfer from PayPal to Prepaid, or even process normal transactions. The last one locked my money down for 3+ days during which time their polite customer service directed me to use the website to transfer funds but when I pointed out they had a worldwide outage they laughed and said “yes, I guess that won’t work for you”. Really?!? If you knew why did you tell me to use it?

The debit card itself has been strangely unreliable. It frequently denies my Google Drive recurring charge of $1.99 despite plenty of funds being available, thus forcing me to reauthorize the storage with Google and cross my fingers that PayPal doesn’t screw it up yet again.

In short, don’t put anything in PayPal that you need with any urgency as it might be half a week before you see it again. Plus the daily limits are a total pain to deal with. Still better than my experience with Ally Bank but that’s not saying much.

Jana
Jana

I see that funds can be withdrawn thru PayPal; however, I can’t find anything explaining how to withdraw. They have a bunch of stuff on adding funds. Could someone point me to the section where I can withdraw the interest from the PayPal Debit Card? Thank you.

BC
BC

An easy way is to transfer to your paypal account. There is also free atms and free bill pay.

Here’s my referral code if you need one: 8939496282

Anonymous
Anonymous

“An easy way is to transfer to your paypal account.”

The issue is HOW??? There’s literally no explanation anywhere on the site! I’ve poured at least a few hours trying to find an option to transfer from the prepaid card to PayPal, but there doesn’t seem to be an option. Because you didn’t give explanation, you’re just saying an empty statement.

Jeremy
Jeremy

I’d like to know this as well.

Jeremy
Jeremy

DOC can you help with this?

Eric
Eric

It appears I just made a big mistake. I purchased a $500 MC gc in WaWa using my Chase Freedom. Before going I checked and saw that it was on the Visa list that Patrick told me about for merchants considered gas stations. Unfortunately, after I went I found this link and WaWa is not shown for Chase Freedom as a gas station. I will only be earning 1% on this for a loss, correct?

https://creditcards.chase.com/freedom/merchants

Eric
Eric

Does anyone know of any other gas stations that may sell Vanilla gc? I haven’t had any luck with 7-11s working out.

BC
BC

Researching the paypal site it seems the easiest way to get money in is ACH. Buying reloads would be a good option if you needed to meet some minimum spend. But if you have a good source for reloadits I would recommend getting the Tmo card as it refunds the $3.95 purchase fee.

BC
BC

I used patterseverywhere referral code

Here’s my referral code: 8939496282

patternseverywhere
patternseverywhere

The bank-to-bank transfer feature doesn’t work with Ally Bank and is only available as a payment account with Wells Fargo. I’d prefer to transfer $5k in and be done with it, but that’s proving difficult. I’ll experiment with my local 7-11s but I’d like to know other good methods for getting money *in* (outside of a true DD or $300 a pop). What checking accounts are working for people?

patternseverywhere
patternseverywhere

Answering my own question here: I got Capital One 360 to work as a bank-to-bank transfer. I’ve technically got five checking accounts and this was the only one that worked for me.

patternseverywhere
patternseverywhere

I used KP’s code.

Here’s my referral code: 8764129478

R.
R.

All this unrelated MS chit-chat in the comments really hides my referral link!

https://www.paypal-prepaid.com/prepaid-debit-card/applyNow.m?AID=Refer2PayPal&uref=4948029340

And to be useful I’ll add that the best way IMHO to get $5,000 in the savings account is by loading the prepaid with ReloadIt cards.

Eric
Eric

Patrick (or anyone else),

Do you know if MasterCard, Discover and/or Amex have a similar link to the Visa link you provided a few days ago to check which merchants are “gas stations”, “supermarkets”, etc.?

Patrick
Patrick

Hi Eric, I’m not familiar with any similar service.

BTW, I’ve seen you ask a lot of questions, particularly on this blog. I highly suggest that you try out the Saverocity Forums if you already aren’t a member. It’s a great community, and while I’m not that active at the moment, I’ve always appreciated the friendliness and stewardship I’ve experienced over there. https://saverocity.com/forum/

Eric
Eric

I actually recently signed up to receive their daily posts. I agree they have good content. I haven’t created an account though. When I get a chance I will look into it more.