High amount of money in PayPal account, smart or not?

36 replies
Is it smart to have e.g. over $100k in your paypal account? If not, please explain why.

I've also heard that you get a dedicated account manager (to get more security and troubleshooting etc..) if you have over $50k-60k+ in your account, is this true?

If it's a bad idea to have a large amount of money in PayPal, what are some other alternatives that provides unlimited deposit/withdraw transactions and unlimited funds in your account?
#account #amount #high #money #paypal #smart
  • Profile picture of the author Alexa Smith
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    Originally Posted by ZedyDiamond View Post

    Is it smart to have e.g. over $100k in your paypal account?
    It wouldn't be, for me, but I don't use my PayPal account very much.

    It depends on your business, turnover, history, transaction numbers, and so on: all the things that make up PayPal's assessment of your account's risk-factors to them. I wouldn't want anything like that amount in my own PayPal account, but you and I probably use PayPal very differently, and that's relevant to the answer.

    One thing's very likely: if your concern is about the possibility of PayPal suddenly freezing your account, then emptying your account regularly and leaving almost nothing there is certainly something they consider "high-risk", and can ring alarm-bells, so you'd perhaps want to avoid doing that. But to me, having $100k sitting there sounds like an excessively heavy-duty way of avoiding that. Wouldn't you rather have some/most of it in a bank account? Or are you eventually going to spend it through PayPal anyway??

    .
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    • Profile picture of the author dad2four
      Alexa Smith - That avatar is not cool, not cool at all.
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      • Profile picture of the author RobinInTexas
        Originally Posted by dad2four View Post

        Alexa Smith - That avatar is not cool, not cool at all.
        Just wait a day or so.
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        Robin



        ...Even if you're on the right track, you'll get run over if you just set there.
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      • Profile picture of the author Yao Daniel
        Hi fellows.
        Originally Posted by dad2four View Post

        Alexa Smith - That avatar is not cool, not cool at all.
        Why?
        I've found it nice... congrats Alexa

        OKAY.
        I really don't know a valuable reason to let a huge amount in my paypal...
        In your place, i'll quickly transfer and let few bucks to invest.

        Good luck.
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    • Profile picture of the author Karen Blundell
      Originally Posted by Alexa Smith View Post

      One thing's very likely: if your concern is about the possibility of PayPal suddenly freezing your account, then emptying your account regularly and leaving almost nothing there is certainly something they consider "high-risk", and can ring alarm-bells, so you'd perhaps want to avoid doing that. But to me, having $100k sitting there sounds like an excessively heavy-duty way of avoiding that. Wouldn't you rather have some/most of it in a bank account? Or are you eventually going to spend it through PayPal anyway??

      .
      It's been my experience that does not ring alarm bells for them at all. PayPal is not a bank - but your account is tied to your bank account or credit card so there is no high risk to PayPal - if anything there is more high risk to you leaving your money with an online payment processor.
      I have had a PayPal account for over 14 years. I almost empty it regularly - I have never had a problem. But then again I'm not in the MMO niche - so it may be different depending on the kind of business you are conducting.

      I think your best bet is to get on the phone with them and get an account rep assigned to you if you are doing that much volume through your PayPal account.
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      • Profile picture of the author nicheblogger75
        Originally Posted by Karen Blundell View Post

        It's been my experience that does not ring alarm bells for them at all. PayPal is not a bank - but your account is tied to your bank account or credit card so there is no high risk to PayPal - if anything there is more high risk to you leaving your money with an online payment processor.
        I have had a PayPal account for over 14 years. I almost empty it regularly - I have never had a problem. But then again I'm not in the MMO niche - so it may be different depending on the kind of business you are conducting.

        I think your best bet is to get on the phone with them and get an account rep assigned to you if you are doing that much volume through your PayPal account.
        I agree. I've never heard of PayPal shutting down an account because the account holder makes regular withdrawals. That's not to say it doesn't happen, though. I have a rule, and that is I never let my PP account dip below $500. However, I regularly withdraw to my bank account when my PP balance exceeds $1000. I think it's much smarter to have your money in your bank account than sitting in an online payment processor.

        Now, on the other hand, if you are constantly withdrawing from PayPal every time you get $20 in there that's another story. As I said, that's why I leave a minimum balance of around $500 in my account at all times. I feel this is smart because I never have to worry about my account going into the red. I think if you constantly overdraw your PP account and leave it in the negative for extended periods of time it won't be long before they decide they don't want to do business with you anymore.

        Like anything, you need to use common sense. It obviously doesn't look good if every time you make $20 you withdraw it and leave only a couple of bucks in your account. That's no way to run a business.
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  • Profile picture of the author ZedyDiamond
    Alexa, great answers as always.

    I was thinking of immediately reinvesting the money from my paypal account, but I was scared about paypal freezing or banning/removing my account without any good reason.. have heard a lot of scary stories. :S

    I think I'm just going to withdraw my funds to my back account, don't want to take any dumb risks..

    Thanks
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    • Profile picture of the author RobinInTexas
      Originally Posted by ZedyDiamond View Post

      Alexa, great answers as always.

      I was thinking of immediately reinvesting the money from my paypal account, but I was scared about paypal freezing or banning/removing my account without any good reason.. have heard a lot of scary stories. :S

      I think I'm just going to withdraw my funds to my back account, don't want to take any dumb risks..

      Thanks
      I can't think of any reason to leave a large amount of money with any institution other than a bank where it is relatively safe. I don't have a lot, but like eggs, I don't keep all, or a large portion, of them in one basket.
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      ...Even if you're on the right track, you'll get run over if you just set there.
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  • Profile picture of the author DWaters
    I do not know what you are doing with your PayPal account but it certainly seems like poor money management to me to have big sums of money there.

    Personally I would rather have my money and invest it in an appropriate instrument (stocks, mutual funds, etc) unless I needed to use it soon. It that case it goes in my bank, never with PayPal.
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  • Profile picture of the author agmccall
    Banned
    If you have over 100 grand and do not know what to do with it, then you probably should not have it.
    Secondly, a internet marketing forum is not the place to get an answer to that question.

    al
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    • Profile picture of the author urangkb
      Originally Posted by agmccall View Post

      If you have over 100 grand and do not know what to do with it, then you probably should not have it.
      Secondly, a internet marketing forum is not the place to get an answer to that question.

      al
      I don't think he says he has that much money leaves in his paypal now he is just giving an example. And yes WF is one of the best place to ask such question as the fastest source to get answers from experienced paypal users..and of course because warrior forum is a forum
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    • Profile picture of the author butters
      Originally Posted by agmccall View Post

      Secondly, a internet marketing forum is not the place to get an answer to that question.

      al
      Why wouldn't this be the place? There are multiple businessmen here who run 6-7 figure businesses each year, seems like a good place to ask.
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  • Profile picture of the author SEOMasters
    Originally Posted by ZedyDiamond View Post

    Is it smart to have e.g. over $100k in your paypal account? If not, please explain why.

    I've also heard that you get a dedicated account manager (to get more security and troubleshooting etc..) if you have over $50k-60k+ in your account, is this true?

    If it's a bad idea to have a large amount of money in PayPal, what are some other alternatives that provides unlimited deposit/withdraw transactions and unlimited funds in your account?

    It's no problem at all.
    I got an audit 3 times due to having high amounts, all passed.
    They also upped my daily cap for receiving money.
    Build a good relationship with them and you are fine.
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  • Profile picture of the author borsaronero
    Originally Posted by ZedyDiamond View Post

    Is it smart to have e.g. over $100k in your paypal account? If not, please explain why.

    I've also heard that you get a dedicated account manager (to get more security and troubleshooting etc..) if you have over $50k-60k+ in your account, is this true?

    If it's a bad idea to have a large amount of money in PayPal, what are some other alternatives that provides unlimited deposit/withdraw transactions and unlimited funds in your account?
    An offshore account
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  • Profile picture of the author tyronne78
    I wouldn't leave 100k sitting in a PayPal account but that's just me. I've heard horror stories of people getting their accounts frozen for close to 6 months.
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  • Profile picture of the author @tjr
    To me, the amounts being talked about are used either to reibest in a business venture, or put somewhere else where it can grow.

    Can't think of a single good reason to leave it doing nothing in PayPal.
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  • Profile picture of the author Lightlysalted
    Whether it's bad or not depends upon your strategy. Paypal is an expensive form of transferring money. If you trade in one country then use a national bank, you'll get a better rate of interest and the cost will be cheaper. If you are trading worldwide then I can understand why you might need a higher balance.
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  • Profile picture of the author laurencewins
    If you don't know what to do with the money, I can give you my PayPal address.

    Seriously, I keep about $100 in my PP account and I transfer extra money to my bank account. I have never had issues with PP but I don't want to face having money tied up there.
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  • Profile picture of the author jungleweb
    Heeeeck no! I would not leave that large amount of money sitting in my PayPal account. Just read all the horror stories on the web about PayPal freezing accounts suddenly - and many times without any good reasoning. Plus PayPal is not a bank and does not have to follow the same laws and FDIC regulations that banks do. It would be best to put that amount of money in some type of investment for positive return or at least in an account that will earn you interest. Makes no sense to leave it like a sitting duck in PayPal. Forget that!
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  • Profile picture of the author Jordan Siegel
    Great question! As a former financial adviser for both Bank of America and Merrill Lynch, as well as maintaining similar practices and keeping in contact with industry insiders, wealthier clients are beginning to transition to investing a higher percentage of their money in personal safes.

    With information having the capability of simply being wiped away by a skilled hacker, wealthier clients are transitioning to protecting their money outside of financial institutions.

    Just make sure it is fire proof.
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  • Profile picture of the author Tsnyder
    Originally Posted by ZedyDiamond View Post

    Is it smart to have e.g. over $100k in your paypal account? If not, please explain why.

    I've also heard that you get a dedicated account manager (to get more security and troubleshooting etc..) if you have over $50k-60k+ in your account, is this true?

    If it's a bad idea to have a large amount of money in PayPal, what are some other alternatives that provides unlimited deposit/withdraw transactions and unlimited funds in your account?
    Forget the horror stories... most of them are nonsense.

    My question is why on Earth would anyone leave $100K lying
    around in any kind of bank or bank related account?

    Sounds goofy to me... LOL

    Better talk to a good CPA... they'll teach you some sound money management practices.
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    • Profile picture of the author heavysm
      Let's just say that I've only heard of accounts getting shut down due to unscrupulous activity on an account, or too much money coming in too fast (product launches etc).

      Some people I've dealt with often have $5,000 - 20,000 grand just sitting in their accounts without much worry at all.

      I do believe, however, for those located in certain countries that $10,000 is the theoretical limit on reception of money within 24 hours. A verified account technically has no limit, but I think this is country specific (a few Asian countries from what I've last heard)

      I've heard of accounts momentarily shut down because of this which a simple call into customer service fixes OR preventatively alerting paypal ahead of time can also allow you to avoid questions on your account.

      I personally only hold enough to cover my planned purchases because I'd much rather that money in my bank account than in possession of a non-bank (paypal )
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  • Profile picture of the author Curtis2011
    Never keep large sums in Paypal. They are notorious for freezing or closing accounts and not giving people their money back, or forcing them to jump through hoops to get it.
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  • Profile picture of the author Devilfish168
    how I wish one day I will get so much money inside my paypal,

    if I have alot , I will faster transfer to my bank account.

    feel more safe and can straight withdraw the money when I need.
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  • Profile picture of the author vishwa
    A Sudden increase in your PayPal balance can alert PayPal security team and they will hold your account and ask you to elaborate the sources of your incoming funds.
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  • Profile picture of the author victorfrancis
    The last thing you want is the risk of having your Paypal account freeze. I never have more than $100 - $200 in my Paypal account, then one day (I forgot what's the problem). But they request for my document for identification purpose. So I scanned my ID card, driving license, as they requested, then after waiting few days, the problem was finally resolved.
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  • Profile picture of the author dad2four
    I just wanna know what you did to get 100k in your PayPal account.
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    • Profile picture of the author rodonet
      Originally Posted by dad2four View Post

      I just wanna know what you did to get 100k in your PayPal account.
      Right. We'd all love to learn the secret.
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  • Just assume money in a bank account or paypal is NOT YOURS and can be "legally" take from you at any time and you will be fine. Why "legally" the big guys make the laws that are against you and for them. The ones with the money make the laws not you and me. I know this is harsh and rare but I know people who's money was confiscated over fine print that is hard to find. So I take my money out of the accounts because it has been frozen before (but not paypal my merchant) and took forever to get it undfrozn, they just do crap like that. So think about that, I hope it never happens but I know it does, lets hope this kind of thing stops in the future it's just teft in my eyes, your money should be your money and they should not have the right to freeze or take it, but of course they disagree with that and they feel it's not yours it's theirs to regulate and "take care of it" for you.
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  • Profile picture of the author ZedyDiamond
    I think I should clear this up

    That $100k was an example. I want to re-invest high amounts of money to make more money, obviously.

    I am worried that paypal suddenly freeze my account (while large sum of moneys in there) without a legit reason..

    My business account is verified, and I have no limits.

    I read all the posts, and I guess I'm just worried too much.
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  • Profile picture of the author EPoltrack77
    Paypal's merchant fee's are insultingly high. Can you get another merchant provider and add their gateway to your website? Paypal will charge you like 30 cents for the dollar where having a gateway directly to your bank will result in much lower transaction fees. Bottom line you'll be bringing home a lot more of your money.
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  • Profile picture of the author ceenote100
    I personally would transfer all that money in the bank account associated with it. I think it's just safer that way. PayPal shouldn't be a place to store that much money. You won't collect any interest on it anyway.
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  • Profile picture of the author Javisito
    I always transfer the funds in my Paypal account to my bank daily. Seems safer somehow once they are in the bank you know that they will stay there!
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  • Profile picture of the author RogozRazvan
    I know cases of people who have over $250.000 in their PayPal account.

    I personally don't keep a lot of money in it. Why?

    Because I've also heard about PayPal accounts being shut down with ease. You don't lose your money. But you lose access to it. PayPal is not a small company and it can't really get away with it (reputation wise) for taking away big sums of money.

    However, suspicious activity can get your account locked up really fast.

    There is also the matter of security. You can get your account locked up if you log-in from two locations in a short period of time. However, apart from a password, there is nothing that prevents someone from actually taking your money. It is very easy to pay or send money with PayPal. Yes, you can ask for a chargeback but it is a huge hassle.

    The good thing about PayPal is that it will not go under any time soon. A bank can be closed for many reasons and people can lose their money there. PayPal is not a single building. It is a web, in the entire world.

    So to give a specific answer - I would not keep $100.000 in my PayPal account but in the same time, if I had to, for any reasons whatsoever, I would not lose sleep over this. Say what you want about PayPal but they are fair. I've got money back from PayPal far faster than from my bank.
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  • Profile picture of the author gmarklin
    I don't think it's smart to keep a lot, There are a lot of ways to invest it for growth instead of keeping it in paypal
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