Cash App is a popular peer-to-peer payments app from Square Inc. [now called Block Inc.] that makes it super convenient to send, receive or invest money. If you have a Cash App account and wondering on a basic question “Is Cash App FDIC insured”, you are on the right post. We will cover the complete details on whether the money in your Cash App account is FDIC insured, what is the scope, and the exclusions.
FDIC insurance is standard federal government protection available for any bank savings or checking account. FDIC insurance means the money you hold in your saving account or checking account is insured against bank failure or theft for up to $250,000 per individual.
However, when it comes to online wallets like Venmo or Cash App, the same regulatory requirements do not apply. Perhaps because wallets are used more for their ease and convenience of payments rather than to store money. This trend is growing though and Cash App has more than 35 million users.
So let’s come straight to the point:
Is Cash App FDIC insured? Yes, if you have a Cash App Card, the money in your Cash App account is covered by FDIC insurance through the Cash App banking partner for up to $250,000.
So is it all good and you don’t need to worry about the security of your money on the Cash App.
Let’s understand the details, before making conclusions.
Is Cash app FDIC Insured?
If you have a Cash App Card, the money in your Cash App account is FDIC insured for up to $250,000 through the Cash App banking partner. However, this does not cover the Cash App investing the balance.
So there are 3 points to note:
- Firstly, you should have a Cash App card to be eligible for FDIC insurance. If you don’t have the Cash App card, the money is not FDIC insured
- FDIC insurance cover is provided by Cash App banking partner which will be Lincoln Savings Bank or Sutton Bank (As the case may be)
- The FDIC insurance covers only Cash App wallet balance and does NOT cover any investing balance or currency
Stored balances of Cash Card customers are eligible for FDIC insurance through our partner bank. These funds are insured up to $250,000 by the FDIC if our partner bank that holds your funds fails and specific deposit insurance requirements are met. If you do not have a Cash Card, your stored balance is not protected by FDIC deposit insurance at this time.Cash App FDIC Insurance Terms
Is Cash App Investing Balance FDIC insured?
No, the balance in your Cash App investing account is not covered by FDIC insurance, even if you have the Cash App Card.
But do note that Cash App Investing is a registered member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC), which offers protection for security accounts, similar to what FDIC offers for bank accounts.
So the Cash App investing balances are SIPC-insured for up to $500,000, including $250,000 for claims for cash, in the event that the Cash App goes bankrupt. This insurance does not cover the fall in the market value of your securities, which is obvious.
We are a member of the Securities Investor Protection Corporation (“SIPC“), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash from the sale of or for the purchase of securities). SIPC does not guarantee or insure against loss of market value; securities are not federally insured against lossCash App Investing Terms
What does FDIC insurance cover? Should you be worried about Cash App FDIC insurance?
While FDIC insurance cover is always good to have, you must understand the scope.
FDIC insurance only comes into the picture when the bank holding your money goes out of business or goes down failing to pay its obligations.
It is federal government protection to protect you against an institution’s failure. It does not protect your money against individual transaction fraud or scams.
Cash App may have its own private insurance against frauds but that does not form part of FDIC cover. Cash App is owned by Square Inc. [Block Inc.] which is a profitable company and has total assets of more than 13 billion as per reports.
That being said, it is better to avoid holding a huge balance in Cash App as you don’t earn any interest on it. The fraud and scam rates also tend to be higher in online wallets. So it does not make a lot of sense to have a large balance with them.
Do other payment wallets provide FDIC insurance?
Venmo offers a very limited FDIC insurance only for money deposited via direct deposit and cash a check deposit.
Google Wallet does not offer FDIC insurance on the funds.
With Apple Pay, you get FDIC cover on funds you hold in your Apple Cash account, through Apple’s banking partner Green Dot Bank.
Will I be refunded money if I get scammed on Cash App
This depends on the specific details of the case.
Cash App allows you to dispute fraudulent transactions. But if you read the fine print, a fraudulent transaction is one that you did not participate in. This can occur if your account is compromised, or your Cash Card has been lost or stolen.
It is better to keep yourself updated on the various scams that are running on the Cash App and avoid any dealings with strangers to save yourself the trouble.
In general, avoid using Cash App for high-value transactions.
So if you have a Cash App card, your Cash App Funds are FDIC insured. But as you see, there is no point in holding a big balance in Cash App as it does not earn interest and FDIC insurance only comes into play in rare scenarios, where the institution fails.