Quote:
Originally posted by DonovanPhillips
Yes, they are technically a bank. Your funds are FDIC insured.
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They are not FDIC insured. The banks they use to hold funds over night are on a pass-thru basis.
That means if the bank they use goes bust, each paypal account is insured for $100,000, but if PayPal itself goes bust, you are likely to have to stand in line with every other creditor and most likely wouldnt receive a preferential dividend.
Edited for typo