PayPal Money Market?

Raynne413 · 08-16-05, 08:28 PM

I just got some money through PayPal, and noticed that they now have a Money Market Mutual Fund account. I'm interested in trying it out, since it would be an easy way to invest, but easily add (or take out) money. Does anyone have any experience with this?

Kamokazi · 08-17-05, 12:37 AM

I use it my PalPay account as my primary means of payment for everything. I am using the money market, it's currently giving about 3.2% Nice little boost at the end of every month, and it's got a much better rate than my savings account.

I also have a PayPal debit card I use for almost all my purchases because I get 1.5% cash back...and this is a DEBIT card, not credit. I just totaled that up for this year (since Jan 1st) and that's $53 bucks I got back for spending my own money. I don't have a CC, so that card works great, it's accepted everywhere Mastercard is. I have my paycheck direct deposited into my bank checking account and I transfer the money from checking to PayPal. Works out very well for me.

I really like the ability to instantly see where my money is going. Kinda like online banking, except most of those tend to be slow in updating. Paypal is instantaneous.

08-17-05, 06:20 PM

I got $14 something for that settlement...woo hoo....

silentknight · 08-17-05, 06:47 PM

I know absolutely nothing about investing.. but I was looking into this, looks simple & easy, the only thing that has me concered is this line:
"it is possible to lose money by investing in the Fund"

How much can be lost?

mabb · 08-17-05, 07:34 PM

Is this only available to US users? I've seen nothing about Money Market or a Debit Card. I'd be interested in both!

Raynne413 · 08-17-05, 07:48 PM

Originally Posted by silentknight

I know absolutely nothing about investing.. but I was looking into this, looks simple & easy, the only thing that has me concered is this line:
"it is possible to lose money by investing in the Fund"

How much can be lost?

This is the standard line for pretty much ANY investment, excluding cds. They HAVE to let you know there is the possibility of a loss, regardless of how slim the chance is. You can't get much safer, or more liquid, than money market mutual funds(and just to be safe, I'll point out that I am NOT yet a registered financial representative LOL).

@Kamokazi
How long have you been using this service?

@Mabb
I do believe it is only for US customers..

vincentnyc · 08-17-05, 08:25 PM

i read it somewhere paypal isn't like a traditional bank...meaning even if u have $$$ in the regular acct...and something happen to paypal i.e. bankruptcy ... u may or may not get ur money back...cuz it is not fdic insured where as traditional bank insured u up to $100K for a saving acct.

food for ur thoughs.

Kamokazi · 08-17-05, 08:52 PM

Originally Posted by vincentnyc

i read it somewhere paypal isn't like a traditional bank...meaning even if u have $$$ in the regular acct...and something happen to paypal i.e. bankruptcy ... u may or may not get ur money back...cuz it is not fdic insured where as traditional bank insured u up to $100K for a saving acct.

food for ur thoughs.

If PayPal is going to go bankrupt, we'll have PLENTY of warning

And I have been using it since feb/mar or so. I have always kinda kept my eye on it, and they have never caused a loss yet, and probably never will.

Raynne413 · 08-17-05, 09:22 PM

Originally Posted by vincentnyc

i read it somewhere paypal isn't like a traditional bank...meaning even if u have $$$ in the regular acct...and something happen to paypal i.e. bankruptcy ... u may or may not get ur money back...cuz it is not fdic insured where as traditional bank insured u up to $100K for a saving acct.

food for ur thoughs.

Savings accounts, yes. But savings only early around 1% interest, if that. Any other investment vehicles, such as CDs, are generally not FDIC insured. It is just something you tend to run into.

vincentnyc · 08-17-05, 10:07 PM

i think cd are fdic insured...i think you are mistaken it with mutual funds or 401K plans that the bank has which are not fdic insured. cds are just like saving bonds...guarantee return no matter what. technically cds are like saving acct. last time i check...there are 3 months, 6 months, and 9 months etc. earning close to 2%-3%.

and to answer kamokazi...yes...paypal may have been in business as long as ebay...but u may never know when u need that fdic insured. better be safe than sorry.

here is the fine quote from paypal:
"Yield varies over time. Money market funds are neither insured nor guaranteed by the FDIC or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 USD per share, it is possible to lose money by investing in the Fund. Distributed by Funds Distributor, Inc. Learn more about the Safety of your Money or about the Fund in the prospectus."

currently, i believe their interest rate are 3.28%. u are earning that 3.28% because it is investing over 300 something companies...that's y u are earning higher than a regular traditional bank interest acct. and much lower if you would have invested in those companies directly urself.

once again...those are like buying stocks....sure some you have some good days, but there are also bad days.

im not discouraging ppl not to put their money in paypal...heck if i have some money lying around...i put some...but this isnt for everyone. dont put all your egg in one baseket.

Kamokazi · 08-18-05, 12:34 AM

But it's an extremely safe fund that they invest in very conservatively. It's unlikely you will lose money from it, but it is possible so they have to have that disclaimer. The market would REALLY have to start taking, and quick for there to be even a remote chance of them losing money.

PayPal is a part of eBay, they have owned it for a while. eBay has no where to go but up. I expect them to be stable for a good long while.

08-18-05, 02:53 AM

paypal makes tons o money and i think it would be rare if they go bankrupt anytime soon....they get plenty of money from just the small transactions i do lol

Raynne413 · 08-18-05, 09:08 AM

Originally Posted by vincentnyc

i think cd are fdic insured...i think you are mistaken it with mutual funds or 401K plans that the bank has which are not fdic insured. cds are just like saving bonds...guarantee return no matter what. technically cds are like saving acct. last time i check...there are 3 months, 6 months, and 9 months etc. earning close to 2%-3%.

You're correct Vincent. It depends upon the bank, though. My bank is Bank of America, and their investment vehicles aren't FDIC (or at least that is what their disclaimer says). What I do like about the PayPal fund, that most cds don't have, is the ability to add and withdraw money any time I want.