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{ 14 comments… read them below or add one }

Pinyo 10.02.07 at 9:56 am

I have the same thought regarding PayPal, but decided against using it as anything more than online payment service because of all the reasons you’ve mentioned.

I’ve also heard some horror stories about PayPal just denied access to some people’s account and money. But I think that’s just rumor because I have PayPal for years without any problem.

MoneyNing 10.02.07 at 10:40 am

Pinyo: PayPal is extremely popular, especially within the blogging community and since it’s owned by eBay now, I’m not as worried about my money as long as I’m not trying to do something fishy. However, the bank is always safer.

Modern Worker 10.02.07 at 10:59 am

Personally, I transfer funds out of there asap after receiving any amount.

MoneyNing 10.02.07 at 11:14 am

Modern: Where do you transfer your money to?

Emily 10.02.07 at 5:53 pm

I like the ease of Paypayl to receive any on-line payment, but I won’t keep my money there since I don’t feel safe for a non-FDIC association. : )

Sun 10.02.07 at 6:28 pm

I keep the money I earned from my little side business in Paypal for the yield you mentioned. Money in Paypal is not particularly unsafe. It’s just like putting money in any money market mutual fund that is not FDIC insured. Do you feel safe if you put your money in Vanguard Premier Money Market fund? If so, there’s no reason to worry too much about Paypal just because it’s smaller.

MoneyNing 10.02.07 at 6:45 pm

Sun: You are right in that it’s almost like every other money market fund, but a company being smaller definitely makes it more riskier. I wouldn’t think Vanguard is going down anytime soon but who knows what a tech company will do, especially if the online eco-system were to change in a big way and paypal/ebay cannot adapt to the change.

I keep a small amount of money in PayPal from my side business also but I probably wouldn’t pour more money into it.

The Finance Buff 10.03.07 at 7:16 am

I agree with Sun. The PayPal Money Market Fund has very little to do with PayPal. It’s a money market mutual fund just like Vanguard’s. The fund is held by a trustee. It’s not an obligation of PayPal. It’s managed by Barclays, the company behind the popular iShares ETFs. Read the prospectus.

MoneyNing 10.03.07 at 9:47 am

Finance Buff: I understand that the fund is not managed by PayPal but because it is directly tied to my paypal account, all the risk of having assets in PayPal goes along with it.

Adventures In Money Making 10.03.07 at 5:01 pm

here’s a good list of places to keep your savings:
http://www.wealthbuildinglessons.com/2007/09/27/optimizing-your-savings/

Adventures In Money Making 10.03.07 at 5:02 pm

oh, and check out http://paypalsucks.com

Guitar Hero 3 Song 10.13.07 at 11:56 am

I did not know all that about paypal. Pretty interesting.

Marcia 10.18.07 at 10:48 am

I used paypal, my dh doesn’t want to use the money market because of in non being insured. I use it for the online payments and making payments mostly ebay. Just keep what I need in there. I have had my account for 6 years. Had a problem someone somehow got use of my debit card and charged stuff to yahcass. I called pp immediately, while on hold with them yet another charged popped up, pp did take care of it though. I cancel the debit card immediately while on the phone. I really liked the card though for the cash back. oh well

MoneyNing 10.18.07 at 12:16 pm

Marcia: Yeah I looked into the debit card too and it seemed like a good option but then I figured it is just as easy to transfer the money from paypal to my checking account and use my normal debit card.

I’m glad they were able to refund the money though!

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