The app allows you to maintain a balance, essentially turning it into a pseudo bank account.
But for most people, carrying a Venmo balance is unnecessary and potentially risky.
Why you should avoid a Venmo balance
Venmo isn’t a bank.
It doesn’t offer the same protections as an FDIC-insured checking or savings account.
If something happens to Venmo as a company, you could lose that money with little recourse.
Additionally, Venmo balances don’t earn interest like a savings account.
So there’s no financial advantage to keeping money there.
In fact, having a balance in Venmo may make you morevulnerable to scams.
Scammers often prefer payment apps over traditional bank transfers.
Leave the rest of your funds in a real bank account where they are insured and may earn interest.
Having funds ready in Venmo allows you to quickly pay other users without needing to transfer money each time.
This may be preferred by active Venmo users who frequently send and receive payments within the app.
A Venmo balance also lets you split bills and meals without needing your bank info handy.
For these use cases, adding money to Venmo is straightforward.
Just be aware of the risks, and keep only what you reasonably need available there.
Go to Balance then select Add money.
Remember, treat your Venmo balance like cash.
Only keep what you need available to make convenient payments.
And if you don’t regularly use Venmo, don’t bother funding a balance at all.
For most people, paying directly from your bank account or card is the smarter way to use Venmo.
For more, here’smy guide to Venmo etiquette.
