Cash App is now offering up to 4.5% interest on savings.
“Earn up to 4.5% interest on your savings on Cash App through our partner bank and reach your goals faster,” the company said in a Thursday (Feb. 15) post on X.
To earn this offer, users must get a Cash App Card, set up direct deposits and then keep depositing paychecks, according to a page devoted to savings on the company’s website.
The card unlocks 1.5% interest on savings through Cash App’s partner bank; direct deposits of at least $300 in paychecks each month increases the interest on savings to 4.5%; and customers will continue earning 4.5% interest as long as they continue those direct deposits, the site said.
Cash App’s partner bank is Wells Fargo, and the interest rate is subject to change, per the site.
The launch of this offer was prompted by Apple recently boosting the interest rate on its Apple Card Savings Account to 4.5%, TechCrunch reported Thursday.
Apple launched the Apple Savings Account with an APY of 4.15% in April 2023 but raised it to 4.5% in January, according to the report.
The tech giant’s entry into savings accounts and its offering of higher savings rates was seen as a potential challenge to both neobanks and traditional financial institutions.
Apple’s announcements were perfectly timed, as consumers, choosing to no longer let their money sit in low-interest savings accounts, were already moving their savings toward neobanks, FinTechs and others who can offer more, PYMNTS reported in April.
By August, Apple Card’s Savings account had attracted over $10 billion in deposits made by users. In addition to reaching that milestone, 97% of Savings customers had chosen to have their cash rewards automatically deposited into their account.
At Cash App, the goal is to bring together financial services, community-based peer-to-peer (P2P) transactions and commerce to “reinvent banking for our customers,” Jack Dorsey, co-founder of Block, which owns Cash App, said in November.
“Our goal now is to win more of the banking use case relationship with our existing customers — ultimately getting to direct deposit and winning a majority of their direct deposit, which indicates they are seeing this as a financial home for them,” Dorsey said.