Is the money I keep in my payment app safe?

The Federal Deposit Insurance Corporation (FDIC), which is part of the federal government, provides insurance to make sure you don’t lose the money in your bank account in the unlikely event that the bank’s business fails. The National Credit Union Association (NCUA) provides similar insurance to account holders at credit unions. Generally, P2P (peer-to-peer or person-to-person) payment apps are provided by companies that do not carry FDIC or NCUA insurance.

Payment apps can be fast and convenient ways to send and receive money. Money typically can be moved without hassle into and out of the app, to a bank, credit union, or card account. Some people keep money as a balance in the app.

A straightforward way to make sure your money is insured is to move it right away from the payment app into an insured bank, credit union, or card account. Use the app to receive and send money, and then promptly move money you receive out of the app and into your account.

When it comes to FDIC or NCUA insurance on money you keep in the app, payment apps differ. Some require you to choose additional products or services in order to have FDIC or NCUA insurance for the balance you keep in the account. Review the information for your app. You might need to sign up for direct deposit, register the account, use the app’s own card, or something else.

Unless your money is protected by FDIC or NCUA insurance, if the company that offers the app fails or goes out of business, you might not be entitled to get your money back, or at least not in the same guaranteed way you can get your money back after a bank or credit union failure.

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