Over the course of a month I usually make around $1000 directly to my PayPal account. At the end of the month, I withdraw my total PayPal account balance to my bank account becuase I don't like having a large amount of money sitting in the account. I was doing some research looking for a high yield investment to put the money I make online into and was surprised to find that PayPal's money market is among the highest yielding investments, and from what I see, it is a very safe investment. I just want to know if this is a good investment and whether there are any risks that aren't currently apparent. I also want to know if the fund and dividends is taxed (capital gains tax, income tax, etc).
Is it FDIC insured? To the best of my knowledge (which may not be very good), with money market funds you pay simple income tax on the interest.
yes with paypal investment, it's still same as other investments. you have to pay tax and also in order to signup, SSN or if foreign, addtional forms are neccessary for taxable.
How is the percent determined. Looking at PayPal now, the return is 3.xx% Is this for a 1 year period, or over just a month. I find it hard to believe that PayPal is paying interest of 3.xx% monthly
It's not FDIC insured, so I would personally go with something along the lines of ING Direct and HSBC. Given the problems people seem to have with PayPal, I would strongly advise against investing large sums of money with them.
This is interesting. I have paypal though Im not interested with this but if given a chance might deal with this.
That is what I thought as well bet the site says Competitive Return: 3.13% 7-Day Average Yield as of 3/20/2008
usually if you keep a larger balance which no one would recommend. you will get a higher return every month
Yeah its really only useful if you have alot of money in it, if you have lots of cash to spread around, it wouldnt hurt to throw a grand or two into it just to see how it builds up.
This is the first time I hear of investing in keeping your money with PayPal. Most of the people I know prefer not to keep large amount on the PayPal account for a long time. With all the fraud going it would definately make me worry if I keep my funds with them say for a year or two. On the other hand, if the market is growing it will soon be pretty obvious.
Hsbc is best one that is insured. Money market can loose money so bank account that pays same percent like HSBC does is much better. I use HSBC right now. I just started buying some dividend stocks from list on site below. They sometimes offer better rate. Found the site in sig of another member. The site has ones you do not need broker for. All income is taxable . Search google for more they have some great sites with reits and trusts that pay high. dividen stocks
I would sign up for it anyways. There aren't any requirements and you aren't locked into it. It will just give you interest for the money in the account. It's basically the same as an ING direct account or HSBC. The only thing is that it isn't officially a bank. I personally wouldn't want to keep too much in there though. I say to just use ING Direct for the big amounts (The general thousand or so) but to join the program to get effectively free money for the $50 or so in the Paypal.
I am just really surprised no one has any experience using it. I would have thought that everyone on this forum was using paypal, and that at least some would have tried this before. Oh, well, Ill sign up for it today then I will post the diveidends I make at the end of the month
If you aren't planning on doing anything else with the money, then it's an okay enough investment, although as someone earlier mentioned, it isn't FDIC insured; meaning the government won't bail you out if PayPal declares bankruptcy and you lose all your money. The other thing to be aware of is that, unlike CDs, you aren't locked in at this interest rate for any particular amount of time, Paypal can raise or lower the % interest rate as often as they want with nothing to stop them. Case in point, I currently have some of my money set aside in a high yield savings account with one of my banks: when I first deposited the money into it, it was making roughly 4.5% APR, but when Bernanke started cutting rates for the Federal Reserve, my interest rate dropped to 4.2, then to 3.9%. If you want to earn a set % of interest for a longer period of time, go with a CD.
I just let the money sit in my account over the course of a month, then at the end of the month I just transfer it to my checking account. I thought it would be a good way to at least earn some interest on money that just sits there anyway. And according to Money Magizine, paypal has been one of the highest yielding money market funds over the last 8 years.