Technology allows us to do tons of cool and convenient things with our money, but big banks are notoriously slow to add new features. If you're not ready to ditch your current bank for a more tech-savvy alternative, you can augment your existing bank account—and get great features-of-the-future like check-deposits-by-smartphone pics and easy payments between friends—with one of the oldest online money services,
PayPal. Here's how.
This guide isn't about replacing your current bank account with PayPal (which you really can't do anyway, since PayPal doesn't have a routing number). Instead, it's specifically about how to add some really great features to your money management process without completely uprooting your financial life.
Below, we'll highlight features you can get by incorporating PayPal into your banking—across your deposits, withdrawals, and payments—along with steps you'll need to follow to set it up.
The Biggest Benefits PayPal Will Add to Your Current Bank Account
Deposits
Most traditional bank accounts are limited in how you can get money into them—you deposit money into the account with cash or a check. Since money going into an account is usually a payment, that's what PayPal is geared for. Here's how you can take payments, and put money into your PayPal account:
- Take a picture of a check with PayPal's mobile app on your Android or iPhone.
- Bump phones with other PayPal users for instant payment with the mobile app.
- Anybody can can send you money, either using their own PayPal account, or using a credit card, by just going to PayPal's web site.
- You can send an invoice directly from your PayPal account to anyone with an email address. The person receiving it can pay you through PayPal or with a credit card, through PayPal's site.
- If you have cash but can't get it to your bank, you can buy a MoneyPak prepaid card from a store like WalMart, and use it to deposit funds directly into your PayPal account.
Once the money's in your PayPal account, it's up to you whether you spend it straight from there, or if you want to transfer it back to your bank. Since PayPal accounts also come with debit cards, you can even pull it from an ATM as cash.
Making Payments and Withdrawals
Making purchases and sending money with PayPal is centered around the idea of being fast, easy, and secure.
- Online retailers like iTunes and Etsy have a faster payment option for PayPal, with no credit card number needed, and pre-filled shipping info.
- You can send money to anyone with an email address or phone number, or with the mobile app by bumping phones with other PayPal users.
- All accounts come with a debit MasterCard with better daily spending and withdrawal limits than debit cards at most traditional banks ($3000 spending, $400 ATM withdrawal).
Managing Funds
PayPal's account management features are well-structured, and changing settings on the fly is extremely quick and easy.
- If you use your PayPal account to buy things, you'll be happy to have a much cleaner web interface for your transaction history than what most banks use.
- Android, iOS, and BlackBerry devices all have apps.
Extra Perks
There are some additional perks to having a PayPal account that don't necessarily apply to normal use alongside a bank account, but are nice nonetheless should you choose to use them, including:
- Discounts from several online retailers.
- If you qualify, you can get a no-fee credit card with cash back rewards.
- If you're a parent, you can create a digital allowance account for teens that lets you control spending, and comes with a debit MasterCard.
- Whether you plan on keeping $100 or $100,000 in your PayPal account, you can enroll for free in a money market account and earn some interest. Most banks require a pretty high balance to be maintained for this.
How to Link PayPal to Your Bank Account
PayPal's always existed on the internet, so they've done a pretty great job allowing users to get money both into and out of their bank accounts. So, along with all the methods available for taking payments, you can also transfer funds back and forth between your bank and PayPal at any time. You just need to add your bank account as a funding source, and verify it.
The verification process is quick and easy:
- You add a bank account by clicking "Add or edit bank account" in the Profile menu at the top of your PayPal account center.
- Click "Add Bank"
- Add your routing and account number and hit Continue. That's it—now PayPal will verify your account.
For verification, PayPal wires two tiny payments of just a few cents each into your account, and asks you for the amounts. After that, your account is considered verified and linked to your bank. That's all there is to it.
Moving money to PayPal: Click "Add funds from bank account" in the Add Funds menu at the top of your PayPal account center, then just enter how much you want to transfer.
How to Use PayPal to Supplement Your Banking
Your regular bank account is important because it gives you local checks and a routing number for things like Direct Deposit. The catch is that most banks want to charge for every little convenience, and they don't generally like to give any special perks just for using your debit card.
So, use your PayPal account for making purchases. If you keep the bulk of your money in your regular bank account, and transfer some to your PayPal account to use for purchases (either online or out in the world), you can get some cash back on your normal purchases without even trying.
PayPal's standard debit card is also a MasterCard, and it comes with 1% cash back when used as credit. That means every tank of gas you fill up, and every load of groceries you buy, can all be earning you back a little bit of money. You don't even have to sign up for a credit card to get it.
You can also keep much better tabs on how your money's spent—purchases are reflected in PayPal's transaction history almost instantly. When you buy something using your PayPal account, it usually takes less than a minute to receive an email letting you know a purchase was just made. Plus, every purchase made through PayPal also has really strong anti-fraud protection—it doesn't matter if the purchase was made with a PayPal ID at an online store, or using the card.
Combining the cash back with buyer protection, PayPal turns into a very solid tool for making purchases, while your regular bank can sit back and relax a bit, keeping your money safe, and earning you interest.
This post is sponsored by:Dr Mobiles Limited
1 Huron Street, Takapuna, North Shore 0622
Tel: (09) 551-5344 and Mob: (021) 264-0000
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