What a Square Savings Account Is and Who Can Open One

Square Savings is a savings account offered through Square, the payments company. It is not a checking account — you cannot write checks or use a debit card tied to it. Instead, it works as a place to hold money separately from your everyday spending, usually with a higher interest rate than a traditional savings account at a bank.

Square Savings is available to people who already use Square for business payments or who are willing to set up a Square Cash account (their digital wallet product). You do not need to be a business owner, though many small business owners use it. The account is held through a partner bank, not directly by Square, which means your deposits are insured up to the standard federal limit.

The main reason people open a Square Savings account is the interest rate. Square advertises rates that change based on market conditions, so the rate you earn today may differ from the rate offered next month. You should check Square's current website to see what rate they are offering before you decide to open one.

Key Takeaways

  • You need an existing Square Cash account or Square business account to open a savings account; you cannot open one standalone.
  • Money in a Square Savings account is held by a partner bank and insured by the FDIC up to the federal limit, currently $250,000.
  • The interest rate Square offers changes regularly, so compare it to other savings accounts before opening one.
  • Transfers between your Square Cash account and your savings account happen within one business day, but moving money out to a bank account you own takes longer.
  • Square Savings has no monthly fees, no minimum balance requirement, and no penalty for withdrawals.

Steps to Open a Square Savings Account

Start by downloading the Square Cash app or logging into your Square business account online. If you do not have either one, you will need to create a Square Cash account first. This takes about five minutes and requires your name, phone number, email address, and a password.

Once you are logged in, look for the Savings option in the app menu or account dashboard. Square places this in different locations depending on whether you are using Cash or a business account, so if you cannot find it when ready, use the search or help function. Tap or click on it to begin.

Square will ask you to confirm your identity. This usually means providing your Social Security number and date of birth. Square uses this information to verify you with the partner bank that actually holds the account. This step takes a few minutes.

After verification, you will see the current interest rate and the terms of the account. Read these carefully — the rate and terms can change, and Square will notify you of changes by email. Once you agree, the account opens when ready. You can begin transferring money into it right away.

How to Move Money Into Your Square Savings Account

Money moves from your Square Cash balance into savings through the app. Open Square Cash, go to your Savings section, and select the option to transfer funds. You will see your current Cash balance and can choose how much to move over. There is no minimum transfer amount and no limit on how many times you can transfer.

The transfer happens within one business day, usually faster. Once the money is in savings, it begins earning interest when ready. Square calculates interest daily and deposits it into your account monthly, so you will see the interest payment show up as a separate deposit each month.

If you want to move money from a bank account you own into Square Savings, you have to do it in two steps. First, transfer from your bank account into your Square Cash account (this takes one to three business days depending on your bank). Then transfer from Cash into Savings (this takes one business day). Plan for up to five business days total if you are starting from a traditional bank account.

Withdrawing Money From Your Square Savings Account

To take money out, open the Savings section in your Square app and select the withdrawal or transfer option. You can move money back to your Square Cash account anytime with no penalty. This transfer takes one business day.

If you want the money in a bank account you own, transfer it first to your Square Cash account, then from Cash to your bank. This two-step process takes two to four business days total. There is no fee for any of these transfers, and you can withdraw all your money at once or in smaller amounts whenever you need it.

Square does not lock your money away or charge you for early withdrawal like some savings products do. You have full access to your balance at any time.

Interest Rates and How Your Money Grows

Square Savings earns interest, which means the bank pays you a small percentage of your balance each month for letting them hold your money. The rate changes based on what the Federal Reserve does with interest rates in the broader economy. When the Fed raises rates, Square usually raises its rate. When the Fed lowers rates, Square's rate typically falls.

Interest is calculated daily — the bank figures out what you earned each day based on your balance that day — but paid monthly. So if you have $1,000 in the account for the entire month, you will see one deposit of interest at the end of the month. If you add more money during the month, the interest calculation includes that new balance for the days it sits in the account.

You can see your interest earnings in the app under your account history. Each monthly deposit will be labeled as interest so you can track how much you have earned over time.

Safety and FDIC Insurance Protection

Your money in a Square Savings account is insured by the Federal Deposit Insurance Corporation (FDIC), a government agency that protects deposits at banks. The FDIC currently insures up to $250,000 per person per bank. Because Square Savings is held through a partner bank (not by Square itself), your account gets this protection.

This means if the bank holding your money fails, the FDIC will return your deposits up to $250,000. You do not have to do anything to get this protection — it is automatic when you open the account.

Square itself cannot access your money or use it for its own business. The partner bank holds it separately, which is why the FDIC insurance applies. This is different from money sitting in your Square Cash account, which may have different protections depending on the partner bank Square uses for Cash.

Comparing Square Savings to Other Options

Before opening a Square Savings account, compare the interest rate to what other banks are offering. Online banks like Ally, Marcus, and Discover often have competitive rates, and some traditional banks offer savings accounts with rates close to what Square advertises. The difference between a 4% rate and a 5% rate matters if you are saving a large amount.

Square Savings has advantages if you already use Square Cash for other reasons — you can move money between accounts when ready and manage everything in one app. But if you do not use Square Cash, opening an account just for savings means you have to set up and maintain a Square Cash account you may not otherwise need.

Also consider how often you need to access your money. Square Savings is designed for money you are setting aside, not for everyday spending. If you need to move money frequently between savings and checking, a traditional bank with both account types in one place might be simpler.

Frequently Asked Questions

Do I need a Square business account to open Square Savings?

No. You can open Square Savings through a personal Square Cash account. You do need either a Cash account or a business account — you cannot open savings without one of those first.

What happens to my interest if I withdraw money before the end of the month?

Interest is calculated daily on your balance, so you earn interest on the money for the days it sits in the account. If you withdraw on the 15th of the month, you earn interest on your balance from the 1st through the 15th, and that interest is paid at the end of the month.

Can I set up automatic transfers into my Square Savings account?

Square does not currently offer automatic recurring transfers from your Cash account to Savings. You have to transfer manually each time. However, you can set up automatic transfers from your bank account into Square Cash, then manually move that money to Savings.

Is there a minimum balance I have to keep in the account?

No. You can open the account with any amount, even $1, and there is no monthly fee if your balance drops to zero. However, you earn interest only on the money actually in the account, so a zero balance earns zero interest.

What if Square changes the interest rate or closes the product?

Square can change the interest rate at any time and will notify you by email. If Square closes the Savings product, you will have time to withdraw your money — the company will not lock you out. Your money remains FDIC insured throughout any changes.