Have Money Sitting in Your Venmo Account? Make This Move Now

Payment apps like Venmo make it easy to send money to different people, split bills at restaurants, and engage in different financial transactions. And a recent Pew Research Center survey found that 38% of U.S. adults use Venmo.

But while there's no question that Venmo is convenient, one thing you don't want to do is leave a sum of cash just sitting in your Venmo account. Here's why.

You deserve to earn a return on your money

When you put money into a savings account while you're not using it, it has the potential to earn interest. And these days, savings accounts are paying rather generously. A number of high-yield savings accounts are offering upward of 3% interest, and some are even offering 4% or more.

That's why you're better off having your cash hang out in the bank rather than a Venmo account if you don't need it right away. Even if you only keep your money in a savings account for a month or so before withdrawing it, you'll still have an opportunity to earn some amount of interest on it. And you might as well collect that interest rather than give it up.

You don't want to fall victim to temptation

It's easy to look at the money in your Venmo account as bonus money, so to speak. There's just something about money not being in an actual bank that has the potential to change your mentality. That's not a good thing, though, because in that case, you might end up blowing the money in your Venmo balance rather than putting it to good use.

Let's say your Venmo balance is $0 and you stumble upon a street fair where crafts are being sold. You might come across a $30 item you like, and the vendor might accept Venmo. But at that point, you'll need to stop and think about whether you really want to spend $30 on an item you weren't planning on buying.

On the other hand, if you have $30 in your Venmo account, you might, in this scenario, just say to yourself, "Well, the money is just hanging out there, so I might as well spend it." But that's not necessarily the right move.

Get your money out of Venmo

There's nothing wrong with using Venmo when you need to, or allowing people to pay you via Venmo when you're owed some cash. But as a general rule, it's a good idea to immediately transfer money you receive in Venmo out of there.

You can move funds from Venmo to your linked checking account without paying a fee if you're willing to have it take a few days (you'll generally pay a fee for an instant transfer). And from there, you can use that money to pay bills or spend it as you normally would.

Of course, if you know you have a payment due in a few days that you'll be sending via Venmo, then it's okay to leave that sum in your account. But otherwise, do yourself a favor and aim to keep your Venmo balance at or around $0.