Should You Leave Money in Peer-to-Peer Payment Apps?

Understanding Peer-to-Peer Payment Apps

Peer-to-peer (P2P) payment apps are digital financial platforms that allow users to quickly transfer money between financial accounts, even if they don’t use the same financial institution. These apps offer more convenience than cash or checks, and sending money is a snap. With just a few clicks, you can send funds to anyone. However, while these apps are fantastic at facilitating quick and easy transactions between users, they aren’t designed to be a long-term storage solution for your funds.

Why You Shouldn’t Store Funds in Payment Apps

Peer-to-peer payment apps offer plenty of benefits, chief among them their ease and convenience. But that doesn’t mean it’s safe to let funds sit in your app’s balance for extended periods of time. Leaving funds in payment apps long-term can expose you to monetary risks and missed opportunities. 

• Higher Risk

For one thing, funds in P2P payment apps are more susceptible to fraud. There are fewer protections in place for these apps than the encryption that is equipped on your financial institution’s online banking app. Additionally, these apps lack the deposit insurance banks and credit unions provide through the FDIC and NCUA, respectively. This means that if a loss occurs, you won’t be able to recoup those funds – they’re gone for good. Scammers often target P2P apps due to the immediacy and finality of transactions and lack of user protection. 

• No Reward

When you keep funds in your balance within P2P apps, that money is simply sitting there idle. You’re completely missing out on the opportunity to earn returns on those funds as you would if they were instead placed in a yield-earning deposit account. Earning interest or dividends on your funds allows you to grow your money, which can’t happen if it sits in an app. Over time, this lack of growth can add up to a significant cost, especially if you typically maintain a larger balance in the app. By keeping funds in these apps, you’re leaving money on the table rather than allowing your funds to grow.

Why It’s Better to Store Funds in a Credit Union Account 

Credit Union accounts are intentionally designed to help you make the most of your money. That’s why our Checking and Savings Accounts are stacked with benefits to help you save and earn more. 

• Fund Protection

All credit union deposits are federally insured by the National Credit Union Administration (NCUA) up to at least $250,000. This is the same level of protection provided by FDIC-insured banks. Federal protection ensures that your money is safe, no matter what.

Peer-to-peer payment apps do not offer any form of fund insurance, which can leave your money vulnerable.   

• Gana dividendos

Credit union accounts allow you to earn dividends on your deposits. Even with a more modest interest rate, the ability to grow your money significantly outperforms earning zero from letting funds sit idle in an app. Over time, these yields can lead to substantial growth.

Peer-to-peer payment apps do not offer the opportunity to earn returns on your app balances. 

• Lower & Fewer Fees

Credit unions are widely known for lower fees when compared to traditional banks and other financial institutions. As your trusted financial partner, we are committed to keeping you safe from hidden fees. Since credit unions are not-for-profit, we return our earnings to you through better rates and fewer fees.

Peer-to-peer payment apps may charge fees for fund transfers, credit card payments, or international transactions. Many apps charge substantial fees for instant withdrawals.

Keep Your Money Liquid & Earn More

If you tend to keep a substantial amount of money in your P2P app accounts, consider transferring the funds to a Money Market Account. Think of these accounts as enhanced savings accounts. Your funds earn greater dividend rates, yet you can instantly withdraw money through online or mobile banking.

• Mayores rendimientos: Money market accounts offer higher earning potential. Plus, the rates are usually tiered, meaning the more you deposit, the higher your interest or dividend rate will be.

• Quick Withdrawals: You can quickly and easily transfer money from your money market accounts through digital banking or by calling the credit union. In exchange for earning higher yields, you are typically limited to six withdrawals per month.

• Insured Funds: As with any other credit union account, your money market account is federally insured by the NCUA up to $250,000. Enjoy peace of mind knowing that your funds are secure and protected! 

¡Estamos aquí para ayudar!

Although peer-to-peer payment apps are a great tool to transfer funds quickly and conveniently, they aren’t the ideal place to store those funds long-term. Instead, move your money to your credit union account so you can protect and grow your funds. We’re here to help make your money work for you!

If you’d like to learn more about our deposit accounts, including Checking, Savings, Money Markets, and Certificates, we’re happy to help. We’ll assist you in determining which accounts are ideal to help you meet your financial goals. Please stop by any of our convenient branch locations or call 888-777-9982 to speak with a team member today.