Cash App Review: What Is It? And How Does it Work?

Banking
Updated: 23rd Jul 2021
Written by Justin Estes
Share this article
What is Crypto Banking? Is it the Future of Finance?
Venmo Debit Card Review: Pros, Cons, and Fees
Banking
July 12, 2021
Written by Justin Estes

Disclaimer: This post contains references to products from one or more of our advertisers. We may receive compensation (at no cost to you) when you click on links to those products. Read our Disclaimer Policy for more information.

If you are a busy person, you will understand how difficult it can be to manage your finances. Cash App was made under Square, Inc. as a remedy for your financial management needs.

The app allows you to quickly transfer money to friends, set up a bank account, and even invest in stocks. The app will enable you to keep a tab on your finances all under one roof.

Depending on your personal finance needs, Cash App may not be the best choice for you, so it is essential to understand exactly what the app has to offer and whether or not it will suit your lifestyle.

What Is Cash App?

Cash App is a popular peer-to-peer payment application available for both Android and iOS. It offers many features, including money transferring, spending, banking, and investing. The app acts as a jack of all trades, which makes it very convenient for everyday use.

How Does Cash App Work?

Cash App allows you to connect your bank account or credit card to the app, enabling you to send or receive money, open a Cash App bank account, and even invest.

Cash App stands out because of its flexible functionality, acting as an all-in-one app for any of your financial needs.

Cash App Pros and Cons

Pros:

  • No monthly fees
  • Free ATM withdrawals when you set up direct deposit
  • Cash Bonus from friends using your referral code
  • Investing
  • Free debit card

Cons:

  • Not FDIC insured
  • 3% credit card fee
  • Cash Card Spending limits
  • Withdrawal limits on the cash card

Cash App Features and Benefits

Cash App has four primary functions. The app allows you to send money, receive money, use your mobile bank, and invest using their app.

Payments: Send & Receive Money with Ease

To send money via Cash App, all you need is the recipient’s phone number, email address, or $Cashtag. The $Cashtag is your username when you set up your account on Cash App.

Once you know the recipient’s information, you will need to choose where you withdraw the money. The money will either be in your Cash App balance, your connected bank account, or your credit card.

It is free to send money from your bank account, but there is a 3% fee if you use a credit card.

When someone sends you money, it will go straight into your Cash App account. From there, you can deposit it into your desired account.

Deposits typically take between one to three business days, but Cash App does provide an instant deposit option with an added 1.5% fee.

Banking

Cash App also allows you to deposit other funds like your paycheck and tax refund check using Cash App Banking. To utilize this feature, you need to order a Cash App card.

Banking with Cash App can help you receive your paycheck up to 2 days faster. If you do decide to use Cash App Banking, just know that it is not FDIC insured.

This means that if something were to happen, there would be no federal support.

Cash App Investing: Stocks and Bitcoin

You may want to consider Cash App over other apps like Venmo or PayPal because Cash App allows you to invest in stocks. Cash App allows users to exchange-traded funds and invest in stocks with just $1 and no commission fees. To utilize this feature, you need to be at least 18 and live in the United States.

Cash App Cash Card & Boost

Users can get the Cash App card, or “Cash Card,” which allows you to choose a “boost” on their account. This boost allows you to save money on certain payments with specific vendors. However, only one boost can be activated at a time.

Low to No Fees

Cash App requires almost no extra cost to use. The only fees they charge are a 3% fee when sending money with a credit card and a 1.5% fee when making instant deposits.

Receive Bonuses for Inviting Friends

Cash App incentivizes users who get their friends to join the app. You are able to send a referral code to a friend, which allows them to sign up and reward both of you with cash bonuses.

How to Sign-Up for Cash App (Step-by-Step)

Setting up your Cash App account is very easy:

  1. You will need to download the app.
  2. Enter the required information, which will send a code to your phone or email. You will need to confirm the phone number or email address. You will then decide if you want a personal account or a business account.
  3. You will link your bank account so that you’re able to send and receive money.

How Do I Send and Receive Money with Cash App?

To send money, open the Cash App mobile app and enter the desired amount you want to send. Tap “Pay,” then enter the recipient’s phone number, email address, or $Cashtag. Then you will enter the reason why you are sending the money, then tap “Pay,” and you are finished.

Receiving money on Cash App is very easy as well. Simply give the sender your account information, either your phone number, email address, or $Cashtag, and let them send you the money.

The payment will appear in your Cash App balance, and from there, you can withdraw it into your desired account.

How Do I Load Money on Cash App?

Once you connect your bank account to the cash app, you can transfer funds through the cash app directly from your bank account, connected credit card, or your available Cash App balance.

If you have funds sitting in your account from previous transactions, you can use those instead of making a withdrawal from your bank account if it covers the balance.

How Does Cash App Compare to Others?

Cash App offers many similar features as its competitors, yet it isn’t as efficient as some. Each service offers different things, so make sure to understand them all so that you can choose the one that best fits you.

#1. Cash App vs. Venmo

Both of these apps work similarly in that they make transferring money efficient and easy. They each charge a 3% fee to send money with linked credit cards, and both offer instant and standard deposit options.

However, Cash App provides a wider variety of functions than Venmo. With Cash App, you are able to not only transfer money with other people, but you can also use their banking feature and invest in stocks.

#2. Zelle vs. Cash App

Zelle works a bit differently than Cash App. Zelle withdraws money from your account and deposits it directly into the recipient’s account, where it is immediately available for use.

On the other hand, you can withdraw money from your Cash App balance, credit card, or debit from a bank account and send it to the recipient’s account.

Cash App allows you to make an instant deposit; however, Zelle is entirely free to use, whereas Cash App does charge a couple of fees.

#3. PayPal vs. Cash App

PayPal and Cash App provide similar offers when transferring money. They both allow you to withdraw money from the sender’s debit card connected to their bank account or from their balance.

They also have a credit card fee and offer instant or standard deposit speeds. Overall, you are going to have more variety in what you can do with Cash App; however, if you just need a service that will transfer money, PayPal will also work just fine.

PayPal is a better option for people who send and receive money regularly. People who run online stores or need to invoice clients will have more tools for managing payments, invoices, and a robust desktop experience.

#4. Apple Pay vs. Cash App

Apple Pay varies from Cash App as it gears more towards iPhone users. If you have an Android, then you are unable to use Apple Pay whatsoever.

Cash App does not have this issue because it is not specific to any mobile device. Both of these apps offer similar things in terms of transferring money, but unless you have an iPhone, you can’t enjoy the benefits of Apple Pay.

#5. Cash App vs. Google Pay

Users may find Google Pay to be more efficient than Cash App because it allows you to withdraw and deposit money

instantly, whereas Cash App can take up to three days, depending on the option you choose.

Cash App does offer more features such as banking functionality and the ability to invest in stocks. If you want a quick and efficient service, then Google Pay could be for you, but if you want something with a lot of functionalities, then Cash App may be your best choice.

Frequently Asked Questions

Cash App is a popular peer-to-peer payment service, but there are some important questions to ask before signing up on its platform:

Is Cash App Legit?

Yes – Cash App was made under the Square, Inc. brand, so you can trust that the app is legitimate.

Is Cash App FDIC Insured?

No – Cash App is not FDIC certified. Even though there are some banking features, your money has no federal backing.

How Much Money Can You Send through Cash App?

Cash App allows you to send $1,000 in 30 days. However, once you enter more information about yourself, you can send more money. You will need to provide your name, date of birth, and the last four digits of your Social Security number.

Does Cash App Charge a Fee to Send Money?

Cash App does not require a fee to send money. However, if you send money via a credit card, there is a 3% transaction fee.

Is Cash App Safe to Use?

Yes – Although the FDIC doesn’t cover the app, the app is still safe to use. Just make sure to send your money to the correct person, or else you may not be able to get it back.

Is Cash App Better than Venmo?

Cash App isn’t necessarily better than Venmo, but you do have more options. With Cash App, you can use their banking features or invest in stocks.

However, If you want a service that is more simple to use and only acts as a money transferring system, then Venmo will be the better option. Moreover, the Venmo Credit Card is also worth taking a look at.

Ultimately, you need to choose the app that will best match your lifestyle so you can get the most out of it.

How Do You Withdraw Money from Cash App?

Withdrawing money from your Cash App account is very simple. First, log in to your Cash App account, then click the “Cash Out” button. Enter how much money you want to withdraw from your balance and how quickly you want to receive the money.

A withdrawal from Cash App usually takes within 1-3 business days, without any cost. However, if you want an instant deposit, there is a 1.5% fee.

Bottom Line: Cash App Review

Cash App is a great method to perform everyday financial activities. Whether you’re splitting a bill or simply paying back a friend, Cash App provides itself to make your life easier.

Unlike some other competing services, Cash App offers more than just money transfers. You are able to set up a Cash App bank account and even invest in stocks online for free.

Although there are benefits to Cash App, it has its limitations. You can only send or receive $1,000 in a 30-day period until your account is verified.

Cash App also does not offer a wide range of trading options, so you may need to look elsewhere if you are looking for a service with more extensive trading possibilities.

Overall, Cash App is solid for those who want the essential functions like banking, investing, money transferring, and spending, all in one app.

There are better services out there that will offer a more complex functionality for each function, but ultimately, Cash App does just fine for everyday use.

Justin Estes
Justin Estes
Justin is an experienced personal finance writer, blogger, and author. His background in accounting and finance led to a passion for helping people make the most of their money and matching them with financial products that enhance their lifestyle. When he's not working, he enjoys hiking, playing guitar, and drinking coffee.