Square Financial Services (SFS), a wholly owned subsidiary of Block, has launched a deposit tier that pays a higher APY to Square sellers who maintain a daily balance of $10,000 or more in their Square Savings account.
The new Square High Yield Savings offers these sellers a 3.50% APY, and it delivers the higher rate to eligible sellers automatically, with no additional action on their part required, SFS said in a Friday (June 12) press release emailed to PYMNTS.
The rate applies to the entire balance and is calculated daily. The APY is subject to change, according to the release.
Square High Yield Savings is designed to deliver meaningful value back to Square sellers and help them meet their savings goals, while also helping SFS grow core deposits to fund its lending programs at a lower cost of capital, the release said.
SFS provides lending products to Square sellers and to customers of Block-owned Cash App, per the release.
“Square sellers are business owners first, but they’re also savers, planners and investors in their own futures,” SFS CEO Richard Rosenthal said in the release. “This rate reflects our confidence in the Square seller base as a source of stable, long-term deposits — and our commitment to returning real value to the small businesses that make that model work.”
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Square launched Square Savings along with other financial products for small business owners in July 2021, saying it aimed to help these owners manage their cash flow with services that would help them automate their savings, among other things.
SFS said in its Friday press release: “For nearly five years, Square Savings has given sellers a seamless, automated ability to put funds aside from the same platform they use to accept payments, organize inventory and manage their staff — resulting in high seller satisfaction while helping SFS build a stable, low-cost deposit base.”
PYMNTS reported in May that Block’s first-quarter earnings report showed accelerating growth across both Square and Cash App. The company is also trying to deepen ties between merchants and consumers through a local loyalty and discovery initiative. Block leadership said during the earnings call that the company expects continued momentum from seller expansion initiatives.
