PayPal's Money Market Fund has delivered competitive returns, with no minimum investment or balance required. As a result, over the years, many investors have placed their money in the Fund.

Even as the Fund has grown, PayPal has continued to pay the costs of administering the Fund — without any reimbursement. However, beginning March 1, the Fund will start to reimburse PayPal for a portion of its expenses, which include legal, technical, compliance and advisory services, and related charges that are customary for mutual funds. As a result, the yield of the Fund will be reduced by 0.25% (one quarter of one percent).

PayPal's Money Market Fund will continue to have no minimum investment or balance. And you'll continue to have the same immediate access to your money. (Note: Redemptions can occur only on business days.)

Thanks for being part of the Money Market Fund.

Sincerely,

PayPal

More money for them, less for us!

Oh, and by the way, we're still not a bank even though we act like one in every way except those that are good for the customer!

the current yield is 4.3%, so that drops it down to 4.05%, meaning it just barely edges out most of the best savings accounts...I'll stick with ING, thanks

I can't believe that an investor would actually think PayPal would be a safe place to put ones' money.

Go with HSBC. It's now 4.80%

Why is everyone so down on PayPal? I don't keep all my savings there, as it's not FDIC insured, but you really can't beat the 4% + interest as well as 1.5% cash back on all purchases. Plus, although money market funds are not FDIC insured, they're very, very safe and stable. What gives? I've been using PayPal as my primary "credit card" for several years with no complaints.

Plus, before the recent change in policy regarding the .25% management fee, it has been consistently ranked as the #1 money market fund in America, benefiting in large part to being subsidized by eBay, which has eaten all management costs until now.

Looks like you haven't read the horror stories with Pay Pal.

here

Thanks for the link - I'll keep that in mind.

My only two experiences with them regarding challenging charges were resolved in my favor - both were small so I guess I was lucky. They made me fill out the standard MasterCard dispute form and the challenged amounts were credited back to my account within 1 week.

(1) The debit card is now 1.0% cash back, not 1.5% (maybe they grandfathered in older 1.5% users, I don't know). 1.0% credit cards are easy to find, and you can get some 1.25% and 1.5% ones as well. Also there are plenty of cards that give you 5% on gas & groceries & drugstores. Also it's a debit card - you should use a credit card instead (link)

(2) You can easily beat the interest rate at Paypal - Currently HSBC, GMAC, ING, and Emigrant all offer betters rates. And they are FDIC insured. And ING and HSBC give you $25 to sign up. Don't forget that PayPal is NOT a bank, and they are not subject to the same regulations as banks. You really can get screwed by them. I would NEVER leave significant money in my PayPal account. I use them, but I don't keep money with them - I transfer it out right away.

Those two reasons, plus the paypal horror stories, mean that NOBODY has a good reason to be using the PayPal money market account or even the Debit Card.

1) You're grandfathered at 1.5% cashback, now it's 1.0%
2) It's a debit card with serious spending limitations. A lot of people reported problems with charges not going through although sufficient funds were available
3) It's a DEBIT card. Less chargeback protection than a credit card. You have NO payment float. 'nuff said on this topic!
4) You leave your money with an institution that can lock your account at will (and is not afraid to do so) and then you're having problems even being able to talk to somebody.

I'm running upwards of 100k/month through PayPal and didn't have any problems with them besides the usual chargebacks but it's still just a "necessary evil" and I much prefer if mu customers pay directly with credit card.

(1) I must be grandfathered in at the 1.5%. I use my PayPal card for all purchases which don't get me double miles on my AmEx card (grocery stores, post office, home improvement stores) or 5% cash back on my Discover Cards (restaurants, gas stations). I have not been able to find another card which offers 1.5% cash back - if I were to find one, I'd probably use it as I prefer a credit card (and the 1 bill per month) to a debit account.

(2) Although PayPal isn't FDIC insured, the money is held (if you choose to enroll) in a money market fund, which, by definition, is subject to the same federal regulations as any other money market fund. Look at the prospectus - the money isn't going anywhere - they're not investing in Enron.

(3) Charging with your debit card (as opposed to using the debit function and entering a PIN number) entitles you to the same protections as using a credit card. By using it as a credit card, you are entitled to MasterCard's standard protections against unauthorized charges, as well as federal regulations regarding the amount of money you can be held responsible for in the event of fraudulent charges.

(4) It is true that any disputed funds could be held in never-never land until you win the dispute, so I guess a good rule of thumb would be to not put next month's mortgage payment in your PayPal account. I'm not living month-to-month on the money in my PayPal account, so if it gets locked up for 2 or 3 months, it wouldn't be the end of the world.

(5) I've never run into any problems with spending limitations, but then again, I don't think I've ever charged anything over $1500 on the card.

(6) I don't understand not being able to talk to someone. I've talked to a live person every time I've called the number on the back of my card. I don't believe I've ever tried at a weird hour though...


All in all, everyone has good points. I don't think you should store your savings in PayPal, but if you're grandfathered in at the 1.5% cash back, I don't think there's a better deal for non-gas/grocery stores/etc. purchases. I've also found it's a very convenient way to transfer money between bank accounts, of which I have several.

MBNA Fidelity mastercard is 1.5%, and their Fidelity 529 is 2.0%. PenFed and others offer 1.25%. You seem aware of the issues, so that's fine, but I wouldn't use Paypal debit even if I was grandfathered in at 1.5%. At 1.0% there's no reason whatsoever to use them.

As for regulations on debit cards - yes, in the end, if someone fraudulently uses it you'll get your money back. But if you use a CC then they are the ones that are dealing with the money loss in the meantime. If you use a debit card (and it's your main bank account) imagine if your entire savings were taken out fradulently. You'll get it back, but it may take some time. With a CC you don't have to worry about it taking time to process a dispute, since they automatically remove the charges before investigating.

So I guess we finally have PayPal employee in our forum now, can we file claims through you?

It's one thing calling for any regular questions/issues you might have. Getting somebody with authority to talk to once your account is locked is a whole different story though. There are plenty of posts on the web that support this.

That's true. As long as everything is OK, Paypal is great. as soon as there's the slightest glitch tho, it's "katie bar the door". You are screwed.