Cash App Vs. Bank Account in 2023 (Is It a Replacement?)

Written By Adrian Volenik

Cash App is a popular alternative to traditional banking, but is it better than a normal bank account?

It all depends on what your needs are. If you’re looking for a relatively simple spending account and mobile payments app, then Cash App should satisfy all your needs. On the other side, a more traditional bank account is better if you need a wider selection of financial products. 

Can You Use Cash App as a Bank Account?

If you live in the US or the UK, you can use the Cash App as your main account because it allows for paychecks to be paid into the account. You can also:

  • Make transfers
  • Request a bank card
  • Connect it to any other bank accounts you may need to pay or keep up.

Cash App has been working hard to ensure that it can be used as a replacement for your bank account, allowing for digital control over your money. Allowing you to have lower overall fees when receiving and sending money than you would usually experience with bank accounts.

However, you will not receive interest on your money being held in Cash App. There are also some limitations on how much you can draw from an ATM each day and how much you can draw each week.

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Do You Need a Bank Account For Cash App?

You can create an account on Cash App without having a bank account, with limited functions, until you have verified your account. When not linked to a bank account Cash App works through your email or your username, avoiding using a specific number or reference. 

Many people working with clients far away prefer to use Cash App specifically because no one involved needs to have a bank account. You will need to have a different way to reference the account if someone makes a transfer or payment from a bank account. 

Many people who have Cash App prefer to work with a bank account linked exclusively to the app. This allows for Cash App to control the money in both accounts and for traditional banks to transfer money to the accounts instead of adapting easily.

READ ALSO: How to Pay With Cash App Without a Card (Using Phone Camera)


Cash App has no monthly account fee. In fact, the only fees are out-of-network ATM withdrawals and instant cashouts.

This is something that many people find very attractive as it means there is no cost to owning money and just leaving it in your Cash App account.

So, how does Cash App make money, then? They mostly earn money from charging interchange fees to merchants every time you use your Cash Card at their shop, online or in-store. 

These fees are really small and have to be shared with Visa and Mastercard. However, when you have millions of transactions each day, they quickly add up. 

On the other hand, traditional banks charge exorbitant fees, even for everyday banking. Here are just some of them:

  • Monthly savings maintenance fee: $1-$10
  • Monthly checking service fee: $3-$20
  • Non-sufficient funds: $25-$37
  • Overdraft: $35
  • Transfer from savings: $10-$12.50

As a matter of fact, Americans paid around $11.6 billion in bank fees in the first three months of the COVID-19 pandemic when they were struggling to simply keep up with rent.

By some estimates, banks make around $34 billion every year from overdraft fees alone. For some major banks, these fees account for almost 10% of their profit.   

Brick-and-mortar banks usually have thousands of employees and physical branches all over the country or state. Online-only banks are slim and don’t have to worry about these kinds of problems. 

Accounts & Cards

Cash App keeps it really simple. It only offers one account type – a spending account coupled with a Visa debit card that can be personalized. 

Apart from that, you can also invest in stocks and Bitcoin and file your taxes completely for free. Namely, Cash App’s parent company Block, Inc., formerly Square, acquired Credit Karma’s tax-filing business for $50 million in 2020

Traditional banks and some digital banks, like Ally, SoFi, or Axos, offer a full suite of financial products. You can get checking and savings accounts, business banking, debit and credit cards, loans (personal, auto, mortgage), refinancing, investing, and retirement products.   

Although it’s still worth shopping around, you can just as easily apply for a financial product you need without opening a new bank account or even switching banks completely. 

Savings Accounts 

Digital banks typically offer savings accounts in a form of:

  • A separate product 
  • Savings vaults, pots, or spaces
  • Having interest rates on checking account balance

The same is mostly true for traditional banks as well. They, of course, offer even more savings products like Certificates of Deposits (CDs) or money market accounts. 

Cash App, being more a mobile payment app than a digital bank, doesn’t offer any savings features or interest rates. Most of its clients don’t carry a huge balance, and 54% of Cash App users have a credit score lower than 600.

Business Accounts 

Apart from personal accounts, banks typically offer business and even commercial accounts aimed at sole traders, small and medium businesses, and corporations. It’s a natural part of their offering. 

I’d say that most digital banks still don’t offer business accounts. There are some challenger banks that focus solely on business accounts, though. The likes of Lily, Novo, or Brex.  

Cash App, rather surprisingly, also offers business accounts aimed at small business owners and entrepreneurs that enable them to connect with customers by sharing their Cash App QR Code, $Cashtag, or email or phone number.

There’s nothing much to say about it as it’s amazingly bare bones. A far better product is Square, the parent company’s all-in-one business account. 

RELATED: 8 Easy Steps to Change Cash App from Business to Personal

Money Transfers

One of the biggest advantages of using Cash App is instant money transfers. Besides its debit card, the bread and butter of the company. 

Transfers are free and can be sent even to people that aren’t Cash App members. However, they will have to make a Cash App account to get the payment.

Big banks got so threatened by this fact that they devised their own platform and app to compete. I’m talking about Zelle, of course. 

Zelle directly transfers money from bank account to bank account without escrow or a waiting period where Zelle holds onto the funds. The transfers are likewise instant. It’s a huge success for banks. 


Cash App allows you to invest through the app. You can buy, hold, and sell stocks and Bitcoin. This typically required an alternative application but can now be done within Cash App.

You can start investing from $1 or have your spare change get invested. Of course, $1 won’t get you far. Only if you persistently invest a relatively considerable amount of money can you really see the fruits of this labor.

There are no commission fees for stock investing, while Bitcoin investing does indeed have fees. If you have a stock portfolio somewhere else, you can transfer it over to Cash App. 

You guessed it, regular banks typically offer many types of investing products. These include stock and ETF investing, managed portfolios, IRAs, self-directed or guided investing, and other similar products. 

If you aren’t sure where and how to start, you can usually talk to an advisor for free and tell them your goals to develop an investing strategy. 


Say what you want, but bank accounts are more secure than the internet would ever have you believe. Most banks have insurance if something goes wrong. This means that if someone steals your card or money, the bank will take responsibility and reimburse you.

Getting hacked or scammed typically doesn’t have any consequences for your bottom line if you report the case promptly. Banks have to abide by laws and protect their customers’ funds

That doesn’t mean banks are purely benevolent and harmless. Many have plenty of skeletons in the closet, and others have had to pay out billions in fines for their wrongdoings. Also, who can forget the 2008 financial crisis, when many banks went under? 

Major US banks are too big to fail, and the government will bail them out in case something like that were to happen again. 

Let’s start with FDIC insurance. Cash App doesn’t have it directly because it’s a fintech company, not a bank. It has, however, partnered with traditional banks to offer banking services and cards. 

For that reason, your funds are insured up to $250,000 if something were to happen with Cash App.

If you aren’t aware, The Federal Deposit Insurance Corporation (FDIC) is a federal agency that protects your money if a member bank goes bust.

Cash App has other problems as well. It’s one of the favorite tools scammers use to transfer money from victims into their pockets. 

Because transfers are so fast and free, the funds that a scammer siphoned off its victim’s account is long gone before the other side even figure out they were scammed. 

It’s also a public secret that Cash App regularly closes thousands of accounts out of the blue, often keeping the funds for months on end. 

Customer Reviews 

Cash App has a 1.2-star rating out of 5 on Trustpilot, with 3% of 3,500 reviewers giving it an excellent score and 93% a bad one. With a 1.2 score, Cash App is comparable to traditional banks like BofA (1.4), Chase (1.3), Capital One (1.2), and Wells Fargo (1.2).

This is one aspect where Cash App and traditional bank accounts are almost exactly the same. It’s not a positive thing, of course. 

Digital banks should improve upon the banking experience and not emulate it with bad customer service, which is the main point of concern for both sides. 

My take on this is that customer satisfaction would improve significantly by simply hiring more customer support staff (not outsourced) and educating them better. 


Cash App is a fantastic choice if you need a no-frills spending account, coupled with instant transfers and an investing platform while living in the United States or the United Kingdom. 

On the other hand, bank accounts will always be the safest way to store your money and allow you to easily spend it anywhere in the world while giving you a wide choice of financial products.

About the Author

Chief Editor at TopMobileBanks

Adrian is a fintech expert who has tested hundreds of financial apps, cards, and accounts. His love for testing digital banks, payment apps, and financial products, in general, is unmatched.

How many digital banking accounts can one man have?

Not enough, if you ask Adrian. As his wallet will soon explode if he doesn’t cut back on the number of cards.

On the plus side, they have enabled him to create awesome How-To Guides that you can read on our site.

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