Cash App is one of the most popular digital banking platforms. With its easy-to-use interface and ability to pay people instantly, Cash App offers an alternative to PayPal and Venmo. What makes Cash App different is its additional features, including integrated Bitcoin trading and zero-commission stock trading. Cash App is the easiest way to split a bill with friends, pay your rent, or repay family and friends.
If you’ve stumbled onto this article, the chances are that you’re already familiar with Cash App. You’re probably weighing up the pros and cons of opening a Cash App business account or personal account.
With over 36 million monthly active users, Cash App is quickly becoming a competitor to traditional banking and personal account options. We’re comparing everything that you need to know about Cash App's business accounts vs personal account, including the perks of their referral program.
Personal vs Business Account: Fees
Just like traditional banking, Cash App offers two account types for you to choose from. Both personal and business accounts can benefit from Cash App’s seamless transactions and payment options. Entrepreneurs and small businesses might be weighing up the pros and cons of opening a personal or business account.
The good news is that setting up your Cash App account is free, whether you choose a personal or business account. You can also receive a free Cash App Visa debit card. However, both personal and business accounts on Cash App charge for instant deposits with a fee of 1.5% – or at least $0.25.
When you use a personal account, there isn’t any monthly fees or foreign transaction fees. When making a payment through your Cash App account using a credit card, you can be charged up to 3%. This charge is used for both personal and business accounts. You can avoid this charge by loading money onto your account using a debit card instead of a credit card.
One drawback of using Cash App’s business account is that the platform charges 2.75% for each transaction received. You may also be charged 1.5% when sending money from your business account to another bank account. If you don’t account for these fees, it’s easy to find yourself coming short. However, standard bank deposits are free for business accounts.
Personal vs Business Account: Transfer Limits
Personal accounts on Cash App have a transfer limit of $250 within a 7-day period. A personal account can also receive up to $1,000 within a 30-day time frame. You can increase these transfer limits by verifying your identity on Cash App using your full name, date of birth, and the final 4 digits of your SSN. Cash App accounts can only be verified for users aged 18 and over.
Meanwhile, business accounts benefit from an unlimited transfer limit. It’s worth keeping in mind that there is the 2.75% transaction fee for business accounts. You can mitigate for this by including the transaction fee when you’re pricing when business pay you through Cash App.
When you verify your identity for your business account, you can send up to $7500 per week. A business account also gives you an unlimited number of transactions, making it easy to pay suppliers and partners.
Read More- What Is Cash App Business Account
Pros and Cons of Personal Accounts
Do you find yourself constantly sending money to friends and family? Are you splitting dinner tabs or rent payments? Cash App removes the hassle of traditional banking or carrying cash with its instant payments. It’s one of the fastest payment methods, whether you’re paying your hairstylist or your best friend.
One perk of using a personal account on Cash App is that it allows you to buy and sell Bitcoin. It can help streamline your finances by keeping everything on one account. While Bitcoin transactions have a 1.76% fee, it’s more favorable than the fees associated with other cryptocurrency platforms.
You can also use Cash App to buy and sells stocks with zero commissions, meaning you don’t have to open another third-party account.
The main drawback of a personal account is the 1.5% transaction fee for instant payments. If you’re happy to receive your payment within 1-3 days, you can avoid this 1.5% transfer fee. Another thing to consider is the $1,000 limit attached to new accounts for the first 30-days. Once you’ve been on the platform for a month, your transaction limit rises.
You’ll also want to consider how much money to have in your Cash App account. Unlike other fintech options, Cash App does not give you Federal Deposit Insurance Company (FDIC) coverage that typically insures accounts for up to $250,000.
If you’re a frequent traveler, you may find Cash App frustrating as it’s currently only available in the USA and UK. When you’re traveling, you may find it necessary to use another peer-to-peer payment app like Venmo or PayPal instead.
Before deciding to open a personal account on Cash App, you want to consider how you plan on using the account. The main factor that will determine whether you plan on using a personal or business account is the transfer limits involved.
Pros and Cons of Business Accounts
Whether you’re a hairstylist, personal trainer, or makeup artist, Cash App can be an added convivence to both you and your clients. Most of us don’t carry cash and Cash App allows for instant payments, ensuring you’re paid on time and making it easier for your clients. If you’ve been using Cash App for your personal account, you might decide to make the switch to a business account.