Tech Supportal logo

Home Tech Problems Solved! Household Technology Support. Any Issue | Any Problem | Anytime

The Smart Home Starter team picks the products and services we write about. When you buy through our links, we may get a commission.

What Bank is Cash App and How Does It Work? Complete Guide

Last Updated Jan 9, 2023
Money and change

With the rising popularity of mobile payment services, smartphone users who are looking for a way to send and receive money may look to Cash App as the answer. Cash App is one of the leading mobile payment services, but what bank is Cash App, and how does it work?

Cash App works through Lincoln Savings Bank and Sutton Bank to provide services to its customers. Cash App itself is not a bank, but the connection to Lincoln Savings Bank and Sutton Bank further ensures that the inner workings of Cash App remain safe, secure, and legitimate.

Below, we’ll discuss more information on how Cash App works. Keep reading to learn everything you need to know about this mobile payment platform!

What Bank is Cash App?

With so many daily activities incorporating the technological side of things, it makes sense that many people have questions about the security of online forums, particularly with finances.

If you have dealt with a local bank your entire life, hearing about using an online platform might raise a red flag. How do you know you can trust Cash App? Which bank does it use?

Cash App itself is not a bank. Cash App uses Lincoln Savings Bank and Sutton Bank to provide services to customers. Both are FDIC-insured banks that cater to both personal and business banking. 

Since many – if not most – Cash App users have never heard of Lincoln Savings Bank or Sutton Bank, simply knowing that Cash App is protected by a bank may not ease your mind.

It is useful to understand exactly how Cash App works with Lincoln Savings Bank and Sutton Bank to ensure that all parties – the Cash App user included – are taken care of.

Which Bank Does Cash App Use?

Cash App works with Lincoln Savings Bank and Sutton Bank to allow users to safely complete transactions, invest, and use a Cash Card.

While many Cash App users complete simple transactions like sending and receiving money, some use Cash App on a larger scale, such as getting their paychecks. 

For this reason, it is important that transactions remain protected. 

While Cash App is a reliable mobile payment resource, it is not impossible to run into trouble with online banking. Lincoln Savings Bank And Sutton Bank keep things as secure as possible.

Lincoln Savings Bank handles the in-app transaction responsibilities involving direct deposits.

Sutton Bank issues Cash Cards and temporarily holds money while transactions clear.

How Cash App Uses Lincoln Savings Bank

Lincoln Savings Bank is the main overseer of in-app transactions. Your Cash App account will be kept safe through Lincoln Savings Bank’s Terms and Conditions.

The best way to send and receive money safely and legally is through a bank, especially when financing online. 

Since Cash App is not a bank, it uses Lincoln Savings Bank as its foundation to allow users to send and receive money. Lincoln Savings Bank’s main responsibility involves direct deposits.

Many Cash App users’ intention when using Cash App is to send and receive money. Direct deposits are a product of this feature.

Through Cash App, you can take money from your credit or debit card or bank account and send it to another Cash App user. You can also receive money from a user in the same way.

Direct deposits on Cash App are protected and monitored by Lincoln Savings Bank. When you send or receive money, that money is temporarily stored with Lincoln Savings Bank.

Lincoln Savings Bank is the main constituent in terms of bank affiliation with Cash App, as all Cash App users have a Cash App account.

However, only select users have a Cash Card.

How Cash App Uses Sutton Bank

Sutton Bank issues Cash App’s Cash Cards. Unlike Lincoln Savings Bank, they do not have access to individual accounts. 

The Cash Card works the same as any other prepaid card. When you use your Cash Card, money is taken from your Cash App account balance.

If you have a Cash Card, your money is FDIC insured up to $250,000. However, this is not through Sutton Bank.

Sutton Bank only holds your Cash Card funds long enough for your card transactions to go through. While your Cash Card is not FDIC insured by Sutton Bank, Cash App’s other affiliations protect your balance.

Unlike Lincoln Savings Bank, which deals more specifically with your entire Cash App account, Sutton Bank is much less involved with specifics outside of your Cash Card.

When you use your Cash Card, money from your Cash App account balance is paid through the card. 

During the transaction, the money is briefly distributed to Sutton Bank while the transaction clears. After it clears, Sutton Bank guides the release of money from your Cash App balance.

How Cash App Works

Knowing how your money is handled through Cash App and its affiliations with banks is important. 

After learning that you can trust the banks that support Cash App, however, equally important is learning how to use Cash App.

Cash App is a medium between your finances and your purchases, meaning you can take money from your bank account, store it on Cash App, and later use that money to send to someone else or load on a prepaid Cash Card for routine purchases.

While knowing the money on your Cash App account is protected by banks is reassuring, it’s also necessary to learn the basic navigation of your mobile Cash App application.

In-App Transactions

If you are new to Cash App, you might have trouble navigating the mobile application. Luckily, the app is simple enough to make sending and receiving money easy.

Cash App’s main in-app functions service users who wish to send and receive funds. Whether you pay a friend for lunch or receive a paycheck from your employer, Cash App can help.

As you will learn shortly, you will need a debit card or bank account to initially send funds to another Cash App user, but you can receive money without first having a bank.

The basics of in-app transactions on Cash App are as follows:

  • Load funds from a credit or debit card
  • Load funds from a bank account
  • Receive funds from another user
  • Buy or sell stocks
  • Buy or sell Bitcoin
  • Purchase items

As you can see, Cash App is capable of assisting you in several financial aspects

Once you have money from your bank or other users in your Cash App account, you can use your balance for everything else.

You can pay a friend through Cash App, deposit money into your bank account, invest, or make purchases. Cash App allows you to monitor many of your finances from one place.

With your Cash App balance or a connected card or bank account, you can enter the amount you wish to send or invest, confirm the amount, and make the transaction.

When another user sends you money through Cash App, the amount will automatically be added to your Cash App balance.

It will remain in your balance until you pay someone else, transfer the money to your personal bank, or use the money for another reason.

Cash Card

Cash App’s Cash Card works almost identically to in-app transactions, aside from the fact that it allows you to make direct purchases outside of the app.

Still, these transactions are filtered through your Cash App account and account balance. A Cash Card works just as any other prepaid card:

  • Making in-person payments at a store
  • Select online purchases outside of Cash App

As with some debit and credit cards, Cash Cards are not accepted forms of payment everywhere. 

Particularly with online purchases outside of Cash App, it is essential to check if an institution supports Cash Cards before setting your mind on making a payment with it.

Your Cash App Cash Card is tied directly to your Cash App account, meaning you cannot directly transfer money from your personal bank account to your Cash Card.

You can transfer money from your bank into your Cash App account. Whatever your Cash App balance is on your application is the amount of money you can use with your Cash Card.

When you make in-store or online purchases with your Cash Card, money is deducted from your Cash App balance, much like money taken from a checking account for a debit card.

Where Does My Money Go When It is on Cash App?

Now that you know how Cash App works with Lincoln Savings Bank and Sutton Bank, you can understand how your money is taken care of when transactions are made.

In-app transactions, like direct deposits, are overseen by Lincoln Savings Bank. The transactions are monitored through Lincoln Savings Bank and remain FDIC insured.

Cash Card purchases are briefly held through Sutton Bank while transactions outside of Cash App clear. 

Once these transactions clear, the money is transferred to the receiver of your payment.

Linking a Card or Bank

Cash App supports most major credit or debit cards, as well as most banks. However, it is a good idea to check if they support your financial institution before creating an account.

You will input your basic information when you create your Cash App account. After setting up your account, you can connect your bank account or credit and debit cards.

After doing so, you will be able to transfer funds received from other Cash App users to your bank. Similarly, you can send money from your bank account to other Cash App users.

Cash App does not share your bank information and has sophisticated fraud prevention. You can trust that the banks involved further work to keep your money and information safe.

Is Cash App FDIC Insured?

With the capabilities of Cash App’s in-app transactions, users might use Cash App as their main resource for buying and selling investments, making purchases, and receiving money.

This means some Cash App users rely heavily on Cash App to keep their money safe. Lincoln Savings Bank and Sutton Bank make this possible.

Your Cash App account is FDIC-insured if you have a Cash Card. Partner banks protect the money you send and receive through the app alone with FDIC pass-through insurance. 

Sutton Bank does oversee the safe transactions of purchases on your Cash Card, but the Cash Card itself is not FDIC insured by Sutton Bank.

The key takeaway is that your account balance is FDIC-insured if you have a Cash Card

If something goes wrong with a partner bank and you do not have a Cash Card, your account balance is not protected.

This ensures that larger amounts of money are protected by Cash App’s partner banks.

How Much Does Cash App Cover?

In the event of a problem with a Cash Card, Cash App’s involvement with FDIC insures up to $250,000. If you do not have a Cash Card, your account balance is not protected. Cash App also does not protect investments in Bitcoin and other stocks.

As long as you have a Cash Card with Cash App, even when you deal with large sums of money, your money will be protected through FDIC pass-through insurance.

Do You Have to Have a Bank to Use Cash App?

You do not have to have a bank to use Cash App, but having a bank makes navigating and using Cash App much easier.

Without a bank connected to your Cash App account, you will not be able to pay for goods and services, pay another Cash App user, or invest unless you have money in your Cash App balance that someone else has sent you.

Connecting your bank to your Cash App account allows you to experience Cash App’s expansive interface in all its detail and capability.

Final Thoughts

Cash App is not a bank, though its partner banks help protect your money. 

As its main bank, Lincoln Savings Bank oversees the details of transactions through your Cash App account.

Sutton Bank issues Cash Cards, but is much less involved in directly protecting your finances on Cash App. 

If you have a Cash Card, your Cash App account is FDIC insured up to $250,000, but Cash App does not protect your account balance without a Cash Card.