Money transfer apps are not to be thought of as bank accounts where you can keep your money as a deposit. In fact, most of these applications clearly state that funds here are not FDIC-insured. Let’s talk a bit about what will happen to your balance if you leave it be for years in the app
1. Background
I heard an interesting story from my friend last week. When Venmo was just launched, he was excited enough to quickly sign up with the service. He kept some funds as Venmo balance but never got the chance to use it. These were early days and services that the app offered were limited. He did not know much about how to Venmo yourself or move funds to another account. Days passed and eventually he did not utilize the app for months.
Now it has been almost a year and he is unable to log back into his account because he can’t remember login details anymore. This obviously made us wonder what will happen to the funds that he had left in the account months back?
Here we are just talking about Venmo that currently has more than 50 million users in the US. Can you imagine the number of people who are regularly using money transfer apps like Zelle, PayPal, Cash App, etc. We can’t get in touch with everyone but it is sensible to assume that there would be many people like my friend who left unused balance in their money transfer apps for a long period of time.
2. How Can You Access The App Again?
Logging in your account again should not be a problem. In most cases, apps let you reset your password if you provide the correct email ID which you had listed at the time of the sign up. If you still face issues with the app login, it is better to get in touch with the specific customer support service and seek guidance.
There are some apps that automatically freeze your account if you leave it unused for a long period of time. You will be informed about this either when you try to log in again or when you contact the support team for help. There are no fees for unfreezing your account but you may have to provide personal information again to complete the sign in. As soon as your account is activated again, you will be able to quickly send funds from one account to another.
3. Will You Get Interest on The Balance?
Each app has a variable policy about this matter but it is safe to say that none of the peer-to-peer payment apps provide interest on the money that you keep in the account. It is highly likely that you would get back to the same amount that you had previously left, that too, if you are lucky!
Since apps like Venmo and Zelle do not insure your funds, any scam or hack may cause you to lose that money. Therefore, it is smarter to withdraw the funds completely if you don’t intend to use the app anymore.
Ending Note
While mobile payment apps are convenient, they are meant for quick transactions only. We advise you to not keep cash in your mobile wallet or payment app as an alternative to having a bank account. This can cause big problems down the road since the money will not be FDIC-insured and you won’t be able to claim any refund later on.
Also read: Tips To Strengthen Your Personal Finances
