Posted by Chuck on July 8, 2015
Checking Accounts

Published on July 8th, 2015 | by Chuck

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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.



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Al
Al

I guess the question I have is if we can reload this card with a credit card… I live in NJ… Thanks!

Eric
Eric

Can any of these prepaid cards (besides Serve, Bluebird and Redcard) be loaded with Visa gift cards?

R.
R.

Note that interest is paid quarterly, not monthly.
So you get ~$60 at the end of each quarter, of which you can take out $45 and leave $15 for the next 3 monthly fees.

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

AB
AB

If I buy the card at 7-eleven, can I load it with my Freedom card for 5% back? Or do they not allow credit for these?

Eric
Eric

I recall someone else mentioning that 7-11 would count as 5% with the Freedom this quarter. Why would it? It is a convenience store (not a gas station or Kohl’s).

barrytuneup
barrytuneup

my 7/11’s in this area code as gas stations, and have been getting 5% back on Freedom and Discover gas cats for years. And they don’t even sell gas!!

barrytuneup
barrytuneup

my 7/11’s in this area code as gas stations, and have been getting 5% back on Freedom and Discover gas cats for years. And they don’t even sell gas!! forgot, i buy PP 500.00 cards

Eric
Eric

Is there any way to check before purchasing if my local 7-11 is the same way?

Patrick
Patrick

Eric, you can check using this link:
https://www.visa.com/supplierlocator/search/index.jsp

Otherwise, simply go to the 7-11 and purchase something cheap to see what it codes as.

Eric
Eric

Isn’t it odd that 7-11 doesn’t show up there? I tried different spellings and it didn’t matter.

Gerald
Gerald

Just fill in the zip code in the supplier address field and select gas stations from the industry segment pull down list. If 7-11 shows up (as it does in my area), you’re good to go.

calwatch
calwatch

If you could categorize all the posts on the high yield saving category that would be great for reference purposes. Thanks.

barrytuneup
barrytuneup

I checked a few years ago what cat 7/11 shows up as. it’s more accurate then the visa locator. Just buy something. A 7/11 on 23rd st in NYC codes as grocery. I bought a coke with a Discover card and checked a few days later on my Disc acct, after it posts. @ 7/11 in CT I did the same and both came up as “gasoline/service stations”. Been buying PP 500.00 cards since, on Chase and Disc when they have gas station cat (like now for Chase freedom)

Eric
Eric

Can you load the PP $500.00 cards to Serve? If not, what is the benefit to it?

barrytuneup
barrytuneup

it’s a bit convoluted. I load to PP acct then use for online purchases or you can send to bank acct that is linked, but be wary, you can’t send too much$ at one time or you can get closed down. read DOC postings on paypal on this site.

Eric
Eric

How do you load to your PayPal account?

NannersOahu
NannersOahu

Cool ! I have been waiting for someone to write about this. At 1 gas station in Hawaii, you can buy this and load with a credit card. Up to $400 for the 4.95 fee AND it comes across as a gas station purchase with Chase Freedom! So far I have loaded $800 to a saving account at a 5% APR. Be sure to use someones referral code and you both get a $5 bonus!

ken
ken

Hi NannersOahu, would you be so kind as to share with me this amazing gas station? 😀

KP
KP

Referral Code: 2567836128

Eric
Eric

Gerald,

Thanks. That worked great. 3 of the first 4 items are 7-11s in my area. I don’t know if I will actually buy anything there but it’s good to know that it counts as a gas station.

Eric
Eric

I went to my local 7-11 tonight and asked the guy if they take credit cards for any of the prepaid cards. He said that it is cash only for all of them. That didn’t surprise me at all as Dollar General told me the same thing earlier today. Where do you people live that allow credit cards for this stuff?

William Charles

It’s usually better to just try and purchase them with a credit card, rather than asking if it’s possible. That way you get more of a chance that the clerk will just try it and if it’s not hard coded, it’ll go through. If you lead with asking if it’s possible, they’ll think maybe it shouldn’t be possible and not take the risk.

Eric
Eric

No one here has implied that 7-11’s official policy is that you can only load with cash. That’s why I didn’t think it was a big deal to ask them. For instance I know that Walmart’s official policy is that you can’t load Serve or Bluebird with a gift card but the system still allows it. I know this because many people have written this. I wasn’t actually going to purchase the cards at the time anyway. No one here ever replied back to me on how they load these cards to their PayPal accounts.

Eric
Eric

I meant to write “replied” and not “implied” in the first line. Do you think you will ever add a feature to edit posts? If you give it a 5 minute time frame then people can’t go back later and edit things.

Patrick
Patrick
Eric
Eric

Is this supposed to be for me? If so, that wasn’t helpful at all. One guy in this thread said that he loads prepaid cards to his PayPal account. I have never heard of that so I asked him how he does that (ie at Walmart, online, etc.). He (and everyone else) proceeded to ignore me which is very annoying.

Rose
Rose

@Patrick – thank you, great blog. Just the info I was looking for, sensible – straightforward advice, and an enjoyable read to boot!

Explained away my fear of “I know not what” but surely someone is going to punish me for making $25 bucks:)

barrytuneup
barrytuneup

Eric, you need to learn how this hobby operates.. but to give a fast lesson. 1)you need a pp acct 2) buy a PP load card at 7/11 that codes as gas station WITH you 5% card (Freedom this Q.) Don’t ask clerk, just give him freedom card and Driver license ( they check names to match). 3)Thank them 4) go home 5)sign on to PP and follow directions to load card to your PP acct online. 5)now you have earned 25.00 from Chase freedom and have 500,.00 to spend online. Or you can read elsewhere how to unload these funds to bank. You can do this 3 times to reach maximum of 75.00 cash back this q.

Eric
Eric

Thanks for the info. That just seems so easy that I can’t believe there’s no catch (besides the good chance of getting shut down by PayPal). Are you referring to your actual PayPal account (which you use to pay Ebay) or this the PayPal prepaid account that Chuck mentioned in this post?

barrytuneup
barrytuneup

I am referring to the regular PP acct you use for Ebay or any other online shopping. You can also see if 7/11 sells vanilla cards also. Mine only sell PP cards. if they sell one vanilla or similar, you can try to get money orders for those cards!

Eric
Eric

I just read an article online that said that there is a 2.7% fee to load PayPal online with the cards you mentioned. Is that correct? If so, that’s a pretty LARGE catch to me.

Rose
Rose

My pay pal account says nothing about fees on pre-paid. It only mentions fees under linking credit and debit cards.
I take it linking is the same as uploading or maybe you have to have a merchant account to be charged a fee?

You know the more I read your comments, Eric, the more confused I become:)

“Maybe someone can tell me where to find the fee schedule that says it would be a 2.7% charge to upload their own pre paid card to your regular pay pal account?”

Eric
Eric

Rose,

I’m sorry if that is not correct information. The problem is that for whatever reason people don’t seem interested in answering my questions on these blogs. That forces me to look elsewhere. That’s why I asked barrytuneup to confirm that was correct but he didn’t respond. Can you provide the link you found that so I can look into it? I’m actually more concerned about PayPal shutting down accounts for doing this. For me I don’t think it’s worth the risk as I don’t want to lose access to my PayPal account.

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.

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.

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