PayPal money market account high yield

One of the things I had been meaning to check into for some time is the fact that PayPal pays a very decent interest rate for cash in your PayPal account. Currently, the interest rate in the PayPal money market account is 4.82%. Not bad.

I went ahead and set up a PayPal account as a test and funded it with a $100 ACH electronic transfer from my bank checking account. The web site says that it could take 3-4 days to complete the transfer (which seems a little long to me).

One of my short-term goals is to have "rainy-day fund" cash spread around a number of accounts for three reasons: 1) in case there is some bureaucratic "problem" with my main account(s) that delays access, 2) in case identity thieves attack my main account(s), and 3) so that I never really see one big number for how much cash I really have and start "thinking" about how to use it -- out of sight, out of mind.

The biggest problem with using PayPal? They are a primary target for phishing spam email, so it will be a real pain to tell whether I have gotten a legitimate alert from PayPal or just bogus email. That means I have to carefully check all those allegedly PayPal emails just to throw most of them away. Fortunately I know enough about email to go in and examine the email source text to see if it really is "phishy".

For now, I'll stick with a modest experiment and then consider expanding it in a few months.

Anybody have any experiences with the PayPal money market fund?

-- Jack Krupansky