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Square Cash App Review: What Is It and How Does It Stack up Against Its Competitors?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Square Cash App Review
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Square Cash, also known as the Cash app, is a peer-to-peer (P2P) payment service that’s part of the Square product portfolio. Headquartered in San Francisco, Square provides payment hardware and software solutions for individuals and businesses.

In this post, we’ll dig into the Cash app service to explain how safe it is to use, how it works and how it compares with other P2P payment products. Any fees and pricing mentioned below are accurate as of the date of publishing.

What is the Square Cash app?

The Cash app service is a simple way to split bills with family and friends. You just need an iPhone or Android to get started. There are a few extra bells and whistles that the Cash app has compared with other P2P payment services — and it’s starting to look more and more like a bank account with the ability to receive direct deposit payments and a companion credit card to make purchases or withdraw money at the ATM. The app can be used to buy and sell bitcoin. You can also use it for personal and business reasons. Cash for Business lets you accept money for goods and services. The Cash app just recently became available in the U.K.

How Square Cash works

The Cash app is remarkably easy to sign up for and use. You download the app onto your iPhone or Android. Next, you enter your phone number and email address to set up the account. Then you select if you want to use the account for personal or business transactions.

Keep in mind, signing up for the Cash for Business via the Cash app doesn’t afford you any significant merchant protections. The only real difference between a personal and business Cash app account is that you can issue refunds. You may want to consider Square Point of Sale instead if you need to do major transactions because it’s more robust.

How to send money with Square Cash

To send money, you hit the pay or request button. You type the name, $cashtag or phone number of the person who’s getting the money. The recipient will get an email or text message with the cash. You can also send money from a browser if you have the recipient’s $cashtag URL. Money can be sent from a debit card, credit card or from your Cash app balance.

How to receive money with Square Cash

To receive money, link your bank account or debit card to the app and select the cashout option. You can cash out the full amount of your balance or you can choose a specific dollar amount.

How long it takes to deposit money into a bank account

The Cash app offers instant and standard deposits:

  • Instant deposits are delivered to your bank account right away. There’s a 1.5% fee for this convenience.
  • Standard deposits are free but can take one to three business days to arrive in your bank account.

Square Cash app fees and fine print

Receiving money is free unless you choose the quick deposit option or you’re accepting money for business reasons. The quick deposit fee is 1.5%. For business transactions, the business owner pays a 2.75% fee for each payment received.

Sending money is free unless you use a credit card. The credit card transaction fee is 3%.

How does the Square Cash app make money?

The Cash app is free for P2P use but there are fees for extras that help the company make money. Fees for business transactions are one major source of revenue. Fees for quick deposits is another way Square makes money from the product.

Sending and receiving limits

If you send more than $250 in a week, you’ll be asked to verify your name, date of birth and the last four digits of your Social Security number. The sending limit increases to $2,500 (in most states) after verification.

If you receive more than $1,000 within 30 days, you’ll also be asked to verify your name, date of birth and the last four digits of your Social Security number. There’s no limit on receiving funds after your account is verified.

Other Square Cash limitations

You have to be 18 years or older to use the Cash app. It’s also only available to residents of the 50 states, though the Cash app recently launched in the U.K.

Square Cash safety

Square Cash and other cash apps are safe to use for the most part as long as you follow instructions and keep other people out of your account. Use the password lock on your phone and don’t share your account information with anyone. Cash itself has security locks including PIN entry, touch ID and facial ID. The app also uses encryption to protect data and stores bitcoin in a secure system.

The Square Cash app fraud protection

Cash app fraud protection is available for unauthorized payments. Unauthorized payments are transactions that show up on your financial statements without your approval. You should report these right away and in writing. You may get a temporary credit pending an investigation of the fraudulent transaction. The fraud investigation can take up to 45 days, and the credit may be revoked depending on the results.

The best defense against fraud is offense. Don’t open spam emails or click links that look sketchy to protect yourself from phishing. Phishing is a tactic fraudsters use to get a hold of your personal information. Lock your phone and don’t share your account. If you share your account with someone (i.e. your child, partner or family member), transactions they make without your permission could be considered authorized since you gave them access.

How to use Square Cash safely

Money scams are what tend to cause the biggest headache with P2P payment systems. Here are three scams to watch out for:

Scam #1: Someone sends you money in “error.”

This scam is when someone you don’t know sends you cash by “accident.” You, being a kind person, send the money back without knowing the initial transaction was from a stolen card or bank account. The fraudster is essentially getting you to send them clean money. The transfer sent “by mistake” is eventually reversed, and the scammer runs off with your cash.

Scam #2: Someone cancels your payment after receiving a product.

Product sellers beware; people can cancel their own payment. A payment can also be reversed if the money is from a stolen source. Cash is technically not yours until it’s deposited into your bank account.

A word of advice: Sign up for a Square business account if you’re doing business. Fortunately, Square has many other hardware and software products for merchants that offer more security for sellers than the Cash app. The Square Point of Sale app, for example, has no monthly fee, countless business features and chargeback protection of up to $250 each month. A chargeback is when a transaction is reversed because of a dispute or fraud. With the Square Point of Sale product, you may not get left completely empty-handed if a chargeback occurs.

Scam #3: Someone sells you a faulty product.

Buyers need to be careful as well. There are no buyer protections when you make purchases through the Cash App. Scammers are crafty. They could ask you to send them money for a knockoff product, counterfeit ticket or broken electronic. You may not notice your product isn’t the right item until it’s too late. There isn’t buyer protection offered through the app to reimburse you after fraud.

How to protect yourself from being scammed

The best way to protect yourself from Cash app scams is to only send money to people you know. This app is intended to help you transfer money back and forth between friends and family. Never send money to rectify an “accident” unless you trust the person.

Have you already been scammed? Report it to the company. You may not get compensation, but reporting new scams could help the company warn other users.

Square Cash app vs. other person-to-person payment networks

Here’s how Cash app stacks up against the competition as far as transfer speed, fees and security.

Square Cash app vs. PayPal

 

Transfer speed

Faster transfer?

Credit card fees

Other fees

Fraud protection?

Square Cash

1-3 days

1.5% fee for instant deposit

3% fee

Sellers pay a 2.75% fee for each swipe, 3.5% + $0.15 for manually entered transactions

Coverage for unauthorized transactions made from your account; chargeback protection for sellers who sign up for Square Point of Sale

PayPal

1-4 days

$0.25 per instant transfer

2.9% + $0.30 fee in the U.S.

Sellers pay a 2.9% fee + $0.30 per sale

Yes, when payments are made for goods and services

PayPal is a payment service that was founded in 1998. For many, it’s considered the go-to for stateside and international transactions. You can connect your bank account, debit card or credit card to PayPal. Money can be sent directly from your PayPal balance or from one of the aforementioned funding sources.

Fees. Accepting money is free (unless you’re selling items). The cost to send money internationally is different from location to location. You can review the full fee table here.

Network reach. PayPal has a broader reach than the Cash app, though Cash recently expanded to the U.K. PayPal can be used in the U.S. and abroad.

Payment types. PayPal payment types are similar to the Cash app. You can send money from your available PayPal account balance or from a connected bank account, debit card or credit card.

Speed. The Cash App and PayPal have about the same standard deposit speed. Both instant transfer options happen right away, but the PayPal instant transfer is cheaper.

Safety. PayPal does let you file disputes for unauthorized personal transactions. PayPal also puts a big emphasis on protecting the safety of buyers and sellers. Both PayPal and Square have business solutions with merchant protections. You can review the PayPal terms in detail here.

Square Cash app vs. Zelle

 

Transfer speed

Faster transfer?

Credit card fees

Other fees

Fraud protection?

Square Cash

1-3 days

1.5% fee for instant deposit

3% fee

Sellers pay a 2.75% fee for each swipe, 3.5% + $0.15 for manually entered transactions

Coverage for unauthorized transactions made from your account; chargeback protection for sellers who sign up for Square Point of Sale

Zelle

1-3 days for non-enrollees

Free transfers within minutes for current enrollees

None

None

There is no buyer or seller protection program; Users are protected from unauthorized activity

Zelle is a P2P payment system that’s offered by a network of banks such as Ally Bank, Bank of America, Citibank, Citizens Bank, Wells Fargo and more. Zelle is easy to use if your bank offers it. It’s a feature right in your online account dashboard. Transfers between Zelle account holders can happen within minutes.

Fees. There’s no fee to use the Zelle service, but you should still double-check that your bank doesn’t charge its own fee for cash transfers.

Network reach. There are more than 100 banks and credit unions that offer Zelle. Check out the full list of financial institutions that offer Zelle here.

Payment types. Money is transferred from bank account to bank account unless one person doesn’t have Zelle available via online banking. Someone who doesn’t have Zelle through their bank can still sign up to send and receive money by adding an eligible debit card to their account. Credit card usage isn’t available. In comparison, the Cash app does allow credit cards.

Speed. You can get money from both the Cash app or Zelle in up to three days. Both offer instant transfers. In Zelle’s case, instant transfers are free between people who are already enrolled.

Safety. Fraud protections for Zelle are slim. If you believe your account may be compromised, you must report it immediately to get any type of coverage. Zelle has no buyer and seller features or protections. Square is a larger platform with additional products for merchants which could made it more appealing if you need more than just P2P capabilities. In the terms and conditions, Zelle makes it clear that you should only be receiving from, or sending money to people you know.

Square Cash app vs. Google Pay Send

 

Transfer speed

Faster transfer?

Credit card fees

Other fees

Fraud protection?

Square Cash

1-3 days

1.5% fee for instant deposit

3% fee

Sellers pay a 2.75% fee for each swipe, 3.5% + $0.15 for manually entered transactions

Coverage for unauthorized transactions made from your account; chargeback protection for sellers who sign up for Square Point of Sale

Google Pay Send

2-3 days

Instant when using a debit card

Cannot use credit cards or prepaid cards

None

100% Fraud protection covers unauthorized purchases from your account

Google Pay Send is the P2P payment app that was once called Google Wallet. Google Pay Send can be used to send and receive money using someone’s email address or phone number.

Fees. Google Pay Send is free to use.

Network reach. Google Pay Send can be used on mobile and desktop.

Payment types. Google Pay Send must be used strictly with a debit card or bank account. The Cash app offers the credit card option when needed.

Speed. Most debit card transfers can happen within minutes, but it can take up to 24 hours to see a charge or credit to your account. Google recommends that you use the debit card option because of its speed. Google Pay Send bank account deposits can take up to three days.

Safety. Unauthorized transactions are covered 100% by Google Pay if they’re verifiable and reported within 120 days. The terms and conditions state the app should be used for only P2P payments with trusted individuals. You shouldn’t be making transfers for purchases. There’s no mention of coverage for purchase scams.

Square Cash app vs. Popmoney

 

Transfer speed

Faster transfer?

Credit card fees

Other fees

Fraud protection?

Square Cash

1-3 days

1.5% fee for instant deposit

3% fee

Sellers pay a 2.75% fee for each swipe, 3.5% + $0.15 for manually entered transactions

Coverage for unauthorized transactions made from your account; chargeback protection for sellers who sign up for Square Point of Sale

PopMoney

1-3 days

No

Does not accept credit cards

Free to receive money or pay a request;
$0.95 to send or request funds

Varies by state; Limited liability for unauthorized purchases if you notify Popmoney of lost or stolen password immediately

Popmoney is another P2P payment service that’s offered through the online account dashboard of participating banks. Like Zelle, Popmoney can do deposits that go directly to your bank account. Money can be sent using someone’s email address, phone number or bank account information.

Fees. Popmoney costs $0.95 when you send or request money. In comparison, the Cash app is always free to send peers money as long as you don’t choose the credit card option. Receiving money through Popmoney is free.

Network reach. You can still send and receive money through the website if you don’t have Popmoney available through your online bank account. However, using Popmoney through a participating bank is the simplest way to use the service. About 2,500 financial institutions currently offer Popmoney. You can see if your bank is in the network here.

Payment types. Payments can be made from an eligible bank account or debit card.

Speed. There’s no instant transfer option available for Popmoney like there is with the Cash App.

Safety. The fraud coverage for Popmoney is limited like with most P2P payment apps. There may be coverage for fraud if you tell Popmoney well in advance that your account could be compromised. You may only receive partial reimbursement if Popmoney finds that reporting your compromised account earlier could have stopped fraud. You should avoid buying and selling through this app because there aren’t purchase protections or merchant protections.

Square Cash app vs. Venmo

 

Transfer speed

Faster transfer?

Credit card fees

Other fees

Fraud protection?

Square Cash

1-3 days

1.5% fee for instant deposit

3% fee

Sellers pay a 2.75% fee for each swipe, 3.5% + $0.15 for manually entered transactions

Coverage for unauthorized transactions made from your account; chargeback protection for sellers who sign up for Square Point of Sale

Venmo

1-3 days

$0.25 per instant transfer

3% fee, except for authorized merchants

None

Unauthorized transfers covered protection if verifiable and reported within 60 days; Authorized merchant payments may be eligible for protection

Venmo is a P2P payment system owned by PayPal. PayPal and Venmo have similar payment processes. You can connect your bank account, debit card or credit card to send money. Money can also be sent from your Venmo balance.

Fees. Venmo isn’t completely free. There’s a pricey 3% fee if you use a credit card to make a payment, unless you’re using a credit card to send a payment to an approved business. There’s also an instant transfer fee of $0.25 if you want money received deposited in your bank account right way.

Network reach. You need to be physically in the U.S. with a U.S. mobile phone to use Venmo. You must also have a bank account to deposit funds.

Payment types. You can make payments from your Venmo balance, credit card, bank account or debit card.

Speed. The Cash app and Venmo both have similar regular transfer speeds and an instant transfer capability. However, the Cash app instant transfer is more expensive.

Safety. Venmo does let businesses use the system to accept payments, but only merchants that are approved. When using Venmo, stick to sending money to family and friends unless you’re buying from an authorized merchant. If you’re an independent seller, there are conditions you have to meet in order to sell with Venmo. One example of a condition is that you can’t receive payment for goods or services in person. Square merchant products may be easier to sign up for and may have fewer limitations.

Square Cash app vs. Circle Pay

 

Transfer speed

Faster transfer?

Credit card fees

Other fees

Fraud protection?

Square Cash

1-3 days

1.5% fee for instant deposit

3% fee

Sellers pay a 2.75% fee for each swipe, 3.5% + $0.15 for manually entered transactions

Coverage for unauthorized transactions made from your account; chargeback protection for sellers who sign up for Square Point of Sale

Circle Pay

1-4 days

Instant when using a linked debit card

Does not accept credit cards

None

Certain unauthorized transactions may be eligible for reimbursement, must report within 60 days

Circle Pay is one of the few payment systems that can be used internationally, and it has no fees or exchange markups. The preferred Circle Pay currencies are U.S. dollars, British pounds and euros. When you need to send money from the U.S. to friends or family abroad, PayPal, Circle Pay and Facebook Messenger (we’ll cover that option next) are payment options to consider.

Fees. Circle Pay is completely free to use. Instant deposits to your debit card are also free.

Network reach. Circle Pay can be used to send money from one country to another. With that said, be sure to shop around for exchange rates whenever sending money internationally. Search the web to check the exchange rate before choosing a payment service.

Payment types. Circle Pay only accepts debit cards or bank accounts to make payments. Square Cash accepts credit cards.

Speed. Instant transfers can happen when depositing money from Circle Pay to a debit card for free.
Bank transactions can take one to four business days or even longer if you’re moving money during the holidays. The Cash app could be just slightly faster.

Safety. Like other P2P payment services, Circle Pay does offer some coverage if unauthorized transactions are made with your account. The fraud has to be caught and reported in a timely manner to get reimbursement. No buyer and seller protections.

Square Cash app vs. Facebook Messenger

 

Transfer speed

Faster transfer?

Credit card fees

Other fees

Fraud protection?

Square Cash

1-3 days

1.5% fee for instant deposit

3% fee

Sellers pay a 2.75% fee for each swipe, 3.5% + $0.15 for manually entered transactions

Coverage for unauthorized transactions made from your account; chargeback protection for sellers who sign up for Square Point of Sale

Facebook Messenger

Up to 5 days

No

Does not accept credit cards

None

Facebook is not liable for payments via Messenger

Facebook users will probably find Facebook Messenger one of the easiest P2P payment systems to get started with because the payment feature is right in the Facebook Messenger app.

Fees. There’s no fee to use Facebook Messenger.

Network reach. The Facebook Messenger app is primarily for U.S. residents. In 2017, Facebook Messenger expanded to let users in France and the U.K. send and receive money within their borders. You can’t send money from one country to another.

Payment types. Debit cards or PayPal accounts are currently the only type of accounts you can connect to Facebook Messenger.

Speed. Facebook Messenger may be the slowest of all the payment apps we’ve covered. It can take up to five days depending on your bank while Cash app can deposit to debit cards instantly with a small fee.

Safety. Facebook puts in the terms that this app should only be used for peer transfers with people you know. If there are any disputes, you have to take them up with the other person in the transaction. Facebook takes no responsibility. The one shiny spot is that Facebook collects information from users like their legal name and birthdate for an added level of security. The name and date of birth on your ID must match your Facebook account to use payments.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor here

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Best of, Reviews

The Top 7 Second Chance Bank Accounts

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Some banks don’t like giving second chances to customers who have less-than-stellar financial histories, especially since it could expose them to expensive risks. A record of bounced checks or debit card overdrafts could easily lock you out of the conveniences of modern banking.

Fortunately, banks also like making money, and some offer special “second chance” accounts that minimize their risk while allowing consumers to stay in the banking system. A second chance bank account gives customers with troubled records a fresh opportunity to demonstrate they can bank responsibly.

When it comes to a second chance account, fees are an unfortunate reality. But some accounts offer customers a better deal than others, and we’ve researched our database to find the second chance accounts with the most reasonable fee structures, while also factoring in whether they provide online and mobile banking, and how accessible accounts are throughout the country.

Account Name

Monthly Fee

Minimum to open

Availability

Chime$0$0Nationwide
Peoples Bank Cash Solutions Second Chance Checking$4.95 $30Nationwide
GoBank Checking Account$8.95, can be waived if you meet requirements$20Nationwide
Radius Essential Checking$0$10Nationwide
Wells Fargo Opportunity Checking and Savings Accounts$10, can be waived if you meet requirements$2539 states (plus Washington D.C.) that have a Wells Fargo location.
BBVA Easy Checking$13.95$25Nationwide, with the exception of Alaska and Hawaii
Woodforest National Bank Second Chance Checking$9.95 monthly maintenance fee if you use a direct deposit; $11.95 without a direct deposit$25Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia

Second chance account basics

With a second chance bank account, customers shut out of traditional bank accounts get the opportunity to win their way back into a bank’s good graces. Similar to credit bureaus, financial services company ChexSystems maintains records of consumers’ banking histories. Bounced checks, overdrawn accounts or instances of fraud can all end up on your ChexSystems record; if you accumulate enough black marks on ChexSystems, banks could deny your application to open a new account.

Because second chance accounts are meant for customers who have demonstrated bad banking behavior, some lack features of traditional accounts, such as overdraft protection. In the eyes of the bank, you represent too much of a risk for them to extend you such courtesies.

Nobody likes paying fees, and we generally advise consumers to avoid needless banking fees due to the many fee-free banking options available. But fees are the price you pay for access to banking when you have a poor record. Plus, the second chance accounts listed below give you access to online and mobile banking, which is always a plus.

The 7 best second chance bank accounts

1. Chime

Chime

Fintech app developer Chime is not a bank, however their online checking account product is open to everybody no matter how bad your record is with ChexSystems. Chime does not check on applicants with ChexSystems, plus they offer lots of non-traditional features to help you get your financial life back on track. Best of all is the fact that they charge no fees at all, and require neither a minimum opening deposit or a minimum balance.

Chime account features:

  • No opening balance or minimum balance requirements.
  • Set up direct deposit for your paycheck, and the funds from each pay period will be deposited as soon as the transaction is initiated, giving you access to your pay up to two days earlier than conventional checking accounts.
  • Automatic savings features to help you save in your connected Chime Savings account.
  • The app sends you daily bank account balance notifications, and sends transaction alerts every time you use your debit card.
  • You can disable the debit card from the app.
  • Send 15 fee-free “friend transfers” P2P payments each month.
  • Nominal 0.01% APY on all deposits.

Fees to watch out for:

  • Chime’s service is almost entirely fee-free: No monthly charges, no ACH transfer fees, no foreign transaction fees, and no ATM fees if you withdraw funds from MoneyPass or Visa Plus Alliance network ATMs.
  • If you make an ATM withdrawal outside of these networks, there is a $2.50 fee.
  • Overdrafts are not permitted, so there is never an overdraft fee.

LEARN MORE Secured

on Chime’s secure website

Member FDIC

2. Peoples Bank Cash Solutions Second Chance Checking

Peoples Bank Cash Solutions

This Texas-based bank offers a second chance bank account that is available nationwide, and so long as you don’t have a record of bank or checking fraud on your record, you should be approved for this account. You’ll need to deposit at least $30 before the bank activates your account and provides you with checks and a debit card.

Fees to watch out for:

  • $4.95 monthly maintenance fee
  • $27.50 overdraft fee
  • $27.50 nonsufficient funds fee
  • $3.95 printed statement fee (which can be avoided with electronic statements)
  • $2.00 ATM withdrawal fee at machines not owned by Peoples Bank
  • $25 stop payment fee
  • $20 account closure fee (if within 90 days of opening account)

LEARN MORE Secured

on Peoples Bank Cash Solutions’s secure website

Member FDIC

3. GoBank Checking Account

GoBank

A brand of Green Dot Bank, GoBank does not run a background check for new checking customers on ChexSystems, and it does not require a credit check. The account comes with a free debit card and fee-free access to a large network of ATMs, although be warned that out-of-network ATM withdrawals carry a $3 fee, on top of whatever the ATM operator charges. GoBank’s $8.95 monthly fee is high. However, this fee can be avoided with a monthly $500 direct deposit.

Account Features:

  • A free debit card
  • 24/7 mobile and online banking
  • Simple budgeting and spending tracker tools
  • Mobile check deposits

Fees to watch out for:

  • $2.95 sign-up fee, waived if you set up your account online
  • $8.95 monthly maintenance fee, waived each month your account receives payroll or government direct deposits totaling at least $500
  • Fees of up to $4.95 charged by retailers to make cash deposits
  • $3 out-of-network ATM withdrawal fee
  • $5 card replacement fee
  • Foreign transaction fee is 3% total transaction

LEARN MORE Secured

on GoBank’s secure website

Member FDIC

4. Radius Essential Checking

Radius Bank

Products from online bank Radius are available to customers nationwide, and accessibility is a strong point in its favor. This second chance bank account only requires customers to deposit $10 to open an Essential Checking account, which is lower than some other accounts on this list.

Account Features:

  • A free debit card
  • 24/7 mobile and online banking
  • Access to Radius’s budgeting and personal finance tracking apps
  • Eligibility to upgrade to Radius’s Reward Checking account after 12 months of positive banking history

Fees to watch out for:

  • $9 monthly maintenance fee
  • $25 per item non-sufficient funds fee (waived on all overdraft items $5 or less)
  • $5 daily overdraft fee

LEARN MORE Secured

on Radius Bank’s secure website

Member FDIC

5. Wells Fargo Opportunity Checking and Savings Accounts

Wells Fargo Bank

Wells Fargo’s Opportunity Checking and Savings Accounts are tailor-made for folks with a lackluster credit or banking history. With a $25 opening deposit, you’ll get access to a second chance bank account that offers most of the bells and whistles of a traditional bank account. The account does come with a monthly fee, although it’s possible to waive it if you meet a few requirements (see below).

Account features:

  • $25 minimum deposit to open
  • Free transfers are available between Opportunity Checking and Savings accounts
  • You can choose to opt into overdraft protection
  • Free access to bill pay
  • “My Spending Report with Budget Watch” is available if you want to pay extra attention to where your money is going
  • Free debit card with access to more than 13,000 Wells Fargo ATMs throughout the country

Fees to watch out for:

  • $10 monthly service fee, waived if any of the following are true:
    • You make 10 posted debit card purchases or payments
    • You keep a minimum daily balance of $1,500 in the account
    • You receive $500 total in direct deposits each statement cycle
  • $35 overdraft and returned item fee
  • $12.50 overdraft protection transfer fee
  • $15 fee for excess activity (exceeding withdrawals from your savings account)
  • 3% foreign transaction fee with your debit card
  • $5 for money orders
  • $31 for stop payments

LEARN MORE Secured

on Wells Fargo Bank’s secure website

Member FDIC

6. BBVA Easy Checking

BBVA
BBVA’s Easy Checking product is available as a second chance account to customers in the Lower 48 (sorry, residents of Alaska and Hawaii, you’ll have to look elsewhere). Note that you must open the account at one of the bank’s branch locations, or by phone outside of the branch network footprint; you cannot open this account via their website. There is a $13.95 monthly service charge to maintain the account. You can request that BBVA upgrade your account one of their regular checking products after 12 months — and ditch that high monthly fee — so long as the Easy Checking account remains active and has a positive balance.

BBVA Easy Checking features::

  • Online and mobile banking, customized alerts, and a free debit card (with option to personalize)
  • $25 minimum deposit to open
  • Free BBVA ATM withdrawals

Fees to watch out for:

  • $3 fee for out-of-network ATM withdrawals
  • $38 insufficient funds fee ($32 in California)
  • $15 deposit item returned fee
  • $32 stop payment fee made over the phone or in person ($30 in California); $25 if made online
  • No fee for closing your account within 180 days of opening

LEARN MORE Secured

on BBVA’s secure website

Member FDIC

7. Woodforest National Bank Second Chance Checking

Woodforest National Bank

This regional bank has a checking account aptly named Second Chance Checking, to help people rejected by other banks access — provided they live in one of the 17 states where a physical branch exists and can meet the $25 minimum opening deposit requirement. Those states are: Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.

Fees to watch out for:

  • $9.95 monthly maintenance fee if you use a direct deposit (or $11.95 without a direct deposit), $3.00 monthly paper statement fee (which can be avoided if you sign up for electronic statements)
  • $9 one-time account set-up fee
  • $2.50 ATM withdrawal fee when used at a non-Woodforest network ATM
  • $15 debit card set-up fee
  • $29 overdraft fee (for each charge)

LEARN MORE Secured

on Woodforest National Bank’s secure website

Member FDIC

Alternatives to a second chance bank account

Get a prepaid debit card

Tired of the traditional banking experience? You could opt for a prepaid debit card instead. With a prepaid card, you can load money onto it and spend at merchants that accept major credit and debit cards. But if you try and spend more money than what’s on the card, the transaction is declined — although this prevents you from accruing any overdraft or insufficient funds fees. This is useful if you feel you may still have trouble managing your spending and need an extra layer of security to prevent you from getting into trouble.

Some prepaid cards offer extra perks like advance direct deposit and free ATMs so long as you stay in their network.

Open a secured credit card

You may also have better luck applying for a secured credit card if your credit score is in good enough shape. Usually, this requires depositing cash with the lender, who then gives you the credit card for the same amount. Each month that you make on-time payments, the bank will report that good behavior to the credit bureaus, helping you boost your credit score. At the end of the payment period (generally 12 months, though it varies by banks), you’ll get the full deposit back.

Secured cards can come with high interest rates and many don’t feature the enticing rewards other high-end cards do, but they get the basic job done for consumers who don’t need a card with a high credit limit.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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James Ellis is a writer at MagnifyMoney. You can email James here

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Reviews, Strategies to Save

American Express® Personal Savings Account Review: A Solid Choice for Online Banking

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

American Express Personal Savings Account

This account is a great option for anyone who wants the flexibility of earning a high interest rate without the withdrawal restrictions that come with a CD.

APY (%)

1.90% Variable

Minimum Deposit Amount to Open Account

$0

Minimum Balance to Earn APY

$1

Permitted Monthly Withdrawals

6

Annual Fee

$0

FDIC Insured?

Yes

Mobile App?

No

Transfer Time

Deposits will be available within five business days.
Transfers from savings to a checking account
take one to three business days.

In an American Express® Personal Savings account, your money earns 1.90% variable APY. It’s currently one of the best rates you can earn from an online savings account. The account does not have a monthly fee and they don’t require a minimum deposit, which makes it an affordable account to open. You will have to fund your account within 60 days of applying, and the FDIC insures your deposits up to full legal limit.

How the American Express Personal Savings account works

The American Express savings account compounds daily at a variable 1.90% APY, and interest earned is credited to your account on your monthly cycle date. The rate is variable, so American Express can raise or lower the interest rate at any time without notice to you before or after the savings account is opened.

Account holders must fund the account within 60 days, which you can do by setting up a bank transfer or direct deposit to the savings account, as well as by sending a check.

What we like about the American Express Personal Savings account

  • High interest rate The 1.90% variable APY is better than what you would earn putting your money in the accounts most brick-and-mortar banks offer. While there are higher rates to be had, American Express has a good offer.
  • Automatic savings It’s easy to make saving automatic when you have an online savings account. With the American Express Personal Savings account, you can easily set up a recurring deposit to pull funds from an external savings or checking account. To make it even easier to resist touching your savings, you can even have a portion of your paycheck directly deposited to the account.
  • Discourages spending With your money in an online account like the American Express Personal Savings account, you can only get your cash after making a transfer to an external checking account to which you have debit card access. The inconvenience makes it that much more difficult to spend your savings.

What we don’t like about the American Express Personal Savings account

  • No ATM card Not having card access is great when you need to prevent yourself from spending your savings, but the hassle of setting up and making an ACH transfer from your online American Express Personal Savings account can be problematic in a pinch. (American Express says transfers will take one to three business days for funds to become available in your checking account.) If you’re worried about this, you can instead turn to an online bank like Synchrony Bank that makes it easier to access your savings by issuing an ATM card tied to your high yield savings account.
  • Variable interest rate The annual yield rate American Express is offering on this savings account is high at 1.90%, but the bank can change that rate at any time for any reason, as the rate is variable. If you’re looking for a more predictable rate of return, consider a certificate of deposit.
  • Limited withdrawals Because this is a high yield savings account, banks are limited by Federal Reserve Board Regulation D to a maximum of six withdrawals and/or transfers from your online savings account per statement cycle without penalty. With that in mind, before you decide how much you’ll put away each month, make sure it’s not more than you can afford to, so you aren’t repeatedly reaching into your savings.

How the American Express Personal Savings account compares

As indicated earlier, the American Express Personal Savings account offer is strong, but how does it compare to other savings accounts?

Institution
APY
Minimum Account Balance to Earn APY
American Express National Bank
High Yield Savings Account from American Express National Bank

1.90%

$1

LEARN MORE Secured

on American Express National Bank’s secure website

Partner Offer

Member FDIC

Synchrony Bank – 1.90% APY and no minimum balance

Institution
APY
Minimum Account Balance to Earn APY
Synchrony Bank
High Yield Savings from Synchrony Bank

1.90%

$0

LEARN MORE Secured

on Synchrony Bank’s secure website

Member FDIC

With $0 to open the account, you can earn an annual yield of 1.90% on savings account balances through Synchrony Bank and there are no monthly fees.

Savings accounts through Synchrony interest is compounded daily and is credited to the account monthly. An ATM card is offered through this account and you can still easily transfer or deposit funds through an ACH transaction or online.

Goldman Sachs Bank USA – 1.90% APY* and $0 minimum to open

Institution
APY
Minimum Account Balance to Earn APY
Goldman Sachs Bank USA
High-yield Online Savings Account from Goldman Sachs Bank USA

1.90%

$0

LEARN MORE Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC


Goldman Sachs Bank USA currently offers an APY of 1.90% on their Marcus Online Savings Account. You don’t need to deposit a minimum amount to open the account, but you will need to have a minimum balance amount of $1* to earn the APY. Interest on the Marcus Savings Account starts accruing the business day you deposit funds into the account. Goldman Sachs Bank USA doesn’t apply any service charges to their savings accounts.

Barclays Bank – 1.90% APY and no minimum balance

Institution
APY
Minimum Account Balance to Earn APY
Barclays
Online Savings Account from Barclays

1.90%

$0

LEARN MORE Secured

on Barclays’s secure website

Member FDIC


With $0 to open the account, you can earn an annual yield of 1.90% on savings account balances through Barclays. While there are no monthly fees, an account that has a balance that is less than $1 for 180 days or more may be closed by Barclays. Savings accounts through Barlcays will start accruing interest the day your initial deposit posts to your account, and interest is compounded daily. While an ATM card is not offered through this account, you can easily transfer or deposit funds through an ACH transaction or online through your account.

American Express CD Rates

These CDs are great for those who don’t have a lot of money to deposit, but the rates are slightly lower than the best CD rates available.

Term

APY

6 months

0.40%

12 months

0.55%

18 months

1.90%

24 months

2.00%

36 months

2.05%

48 months

2.10%

60 months

2.15%

CDs from American Express do not come with a minimum deposit amount. You’re free to deposit as little or as much as you want to begin earning interest on any of its CD terms. This is great for individuals who don’t have a lot of money to deposit in CDs offered by other online banks. The downside is that you won’t be receiving as high of an APY as you could at other online banks. While the rates aren’t terribly low, they just don’t compare to most of the best CD rates currently available.

How CDs offered by American Express work

American Express offers terms spanning from 6 months to 5 years. Interested is credited on a monthly basis and compounds until it matures. You can choose to have the interest transferred out of the CD and into the American Express Personal Savings Account on a monthy basis, transferred into a linked account, or mailed to you monthly, quarterly, or annually via a check. If you touch the principal, however, you’ll incur an early withdrawal penalty. The penalty is based on your CDs term:

  • For CDs with a term of less than 12 months: 90 days worth of interest
  • For CDs with a term of 12 months, but less than 48 months: 270 days worth of interest
  • For CDs with a term of 48 months: 365 days worth of interest
  • For CDs with a term of 60 months: 540 days worth of interest

If you’re able to keep your principal and interest within the CD, you’ll receive notice, either by mail or email, that your CD is about to mature in ten days. If you don’t tell American Express that you do not wish to renew your CD, they’ll automatically renew the CD with the same term unless they no longer offer that term. You can call American Express any time before your maturity date to tell them that you do not wish to have your CD automatically renewed.

Online banks vs. brick-and-mortar banks

Online banks have been having a moment not only because of the rise in mobile banking among consumers, but also because they can simply offer consumers more benefits because they don’t have to worry about as many overhead expenses as brick-and-mortar banks. An August 2017 study by DepositAccounts.com, another subsidiary of LendingTree, shows the annual percentage yield internet banks offer on savings accounts is more than four times what brick-and-mortar banks or credit unions offer. The same analysis shows annual percentage yields on internet bank savings accounts have surged 29 percent since January 2016.

Simply put, the main benefit of putting your money in an online savings account is your money does more for you. To show this, DepositAccounts provided an example, based on the average APYs in those savings categories: If a saver were to put $100,000 in a savings account and leave it alone for 10 years, they would earn $8,338.79 at an online bank versus $1,747.04 in a brick-and-mortar bank and $1,895.28 in a credit union, assuming a fixed APY.

Overall Review of the American Express Personal Savings Account and CDs

Overall, the American Express Personal Savings Account is a solid online savings option. The interest rate they offer is high and the features of the account are comparable to other online banks’ savings accounts. While there are certain aspects of the Personal Savings account that could use improvement, other online banks present the same obstacles. As was mentioned earlier, the American Express Personal Savings account is one of the best options available.

The CDs American Express offers, on the other hand, aren’t quite as good. The 6 and 12-month CDs are nowhere near the best rates offered by other online banks and the 18 – 60-month CDs fall short of the other rates offered. The only feature that makes American Express stand out from most of the other online banks is that this bank doesn’t require a minimum deposit to open an account or start earning interest. If you’re not quite ready to deposit a huge chunk of money into a locked account, you may want to start out with on of the CDs offered by American Express.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]