Twitter to Potentially Offer High-Yield Money Market Account. Here's What We Know

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KEY POINTS

  • Twitter users may be able to earn high-interest yields through Twitter.
  • A successful launch could affect both Twitter users and non-Twitter users.
  • The future of Twitter money market accounts is still murky, though.

Twitter wants to launch on-platform spending to new highs.

Elon Musk, CEO of Twitter, has been busy these days. In a recent Twitter Spaces, he suggested Twitter might offer a money market account or high-yield savings account through Twitter. The best money market accounts provide high-interest rates and low balance minimums.

What is a money market account?

A money market account is like a savings account, but it also shares some of the features of a checking account. They typically offer people high interest rates and the ability to withdraw money through checks or debit cards. And yes, they are also FDIC-insured.

How would it work on Twitter?

Here’s how a money market account on Twitter could work:

  1. Twitter users get verified through a monthly $8 Twitter Blue subscription.
  2. Twitter gives users $10 or so to send/spend through Twitter.
  3. Users earn a yield on their Twitter account balance.

To earn money on their balance, Twitter users need to be able to add money to their Twitter money market account. Elon Musk suggested a few ways Twitter users could add to their balance. Here are some:

  • Send and receive money through Twitter (like Venmo)
  • Charge Twitter users to view paywalled tweets
  • Connect bank account to add/withdraw money

Twitter users could connect debit cards to their accounts, among other things. There’s a lot of room for added features here. All of this is still up in the air, so take it with a grain of salt.

Why does it matter?

Twitter is a familiar name. It may be easier for regular folks to build trust with Twitter than with big banks. Twitter is a social media platform used daily by over 205 million people worldwide. If even a fraction of users open Twitter money management accounts, Twitter could disrupt the banking industry.

Once users start opening accounts with Twitter, it's not hard to imagine them using other financial services the company offers -- things like peer-to-peer payments and personal loans. If Twitter enters the finance world, it could quickly become a one-stop shop for all things financial. The social media company could end up competing with traditional banks.

Blending social media and finance isn’t a new concept -- it’s been successfully deployed in China through apps like WeChat -- but American companies have struggled to copy that success. Apps like Cash App and Venmo are inching their way in that direction, but Twitter could be the first.

If Twitter successfully launches the service, even folks who don’t use Twitter may notice changes to their bank accounts or digital wallets. Companies may attempt to reverse-engineer a successful Twitter product launch by adding social features to their platforms.

A lot is still up in the air, but one thing is for sure: a money market account on Twitter would offer new money-management options to regular Twitter users.

What’s next?

Before getting too excited (or worried -- remember, this is all pending!), consider whether you should open a money market account. There are good reasons to open a money market account, but it’s not suitable for everybody. Long-term investors have historically earned better yields from smart investments in the stock market or housing market.

Only time will tell if Twitter actually offers money management accounts (or something similar). If it does, it has the potential to shake up the traditional banking industry in a big way. Elon Musk, Chief Twit, will likely continue to update the public via Twitter.

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