Image Credit: Shutterstock.com source

Your PayPal account can be used to hold funds, but can you really use it like a bank account? It may seem viable because it is accepted at so many online retailers — even some in-store retailers.

Find out how, if at all, you can use your PayPal account as a checking account. Also, is it wise to do so?

PayPal Account Access Limitations

The most common way to use PayPal funds is by purchasing something through a merchant that accepts it. Usually, you’re buying from an online website, such as eBay.

The biggest caveat is that you don’t have access to a debit card or checks.

Therefore, in short, keeping your funds in your account is not as wise because access isn’t convenience. You’re limited to spending your balance only at places that accept PayPal.

Debit card is available to business accounts

The standard PayPal account doesn’t offer a debit card, but the business PayPal account does come with a PayPal Business Debit MasterCard®.

To qualify for a business account, you must have received at least $500 within the last 12 months.

The card allows you to:

  • Withdraw cash from any Cirrus/Maestro ATMs (fees apply)
  • Pay with your card anywhere MasterCard is accepted
  • Earn 1.0% cash back

Although the debit card does make your PayPal account a little more similar to a bank account, there are still key features that you’re missing.

Again, it doesn’t come with checks that you may need to pay bills or to pay other people.

You cannot receive direct deposits. So, if you want to use the account to collect your income, you’ll be disappointed.

Most importantly, PayPal isn’t regulated like a bank. As a result, there are certain consumer protections that do not exist.  Paypal can freeze an account when it suspects fraudulent activity, which can hamper your ability to transact business.  Monitoring your account activity is vital to relying on its use on a regular basis.

While a debit card provides conveniences, there are definite precautions you should take before you choose to rely on it as a payment method.  The best alternative may be to be intentional about using your balances for certain special purposes, but not to use it as your bank. Having your funds frozen when your mortgage payment is due could cause major problems.

Get a Proper Bank Account

Simply put, PayPal is not the best place to put your money. Use a proper bank account to ensure that your money is safe and easily accessible when you need it.

You can get a checking and/or savings account without hefty monthly fees. They can come with great features with consumer protections and a high-level of convenience.

These are some of the best checking accounts that you should consider instead of PayPal:

And, if you want to focus on savings, these are some of the top choices:

Did you enjoy this article? Yes No
Oops! What was wrong? Please let us know.

Ask a Question

  • Paul Mark

    It is beyond foolish to keep money in a PayPal account. PayPal have an undeniable reputation for suddenly “limiting” people’s accounts for no good reason – in which case they can keep your funds for 180 days and then close your account. If their security algorithm is triggered by the way you use or login to your account, you are screwed.
    Don’t expect a response that makes sense from a customer service rep either. The department that handles “limitations” is completely non-contactable.
    They are a law unto themselves and would be the first corporation I would set out to destroy if and when I have the ability to do so. An evil, greedy, secretive clan.

    • mahi

      Agreed here

    • Mysterious

      Totally agreed. My advice is for anyone that keeping a lot of money in PayPal, transfer it and it is always a good idea to separate your money. You never know when PayPal will turn on you and limit your account all of a sudden. Good luck.