Square to Pay 3.5% Interest on U.S. Business Deposits

Square announced it will pay 3.5% interest on eligible business deposits held on its payments platform for sellers in the United States. The company noted funds will remain available for daily operations and transfers.

The rate applies to qualifying balances on accounts that receive payments through Square’s point-of-sale and online tools. Sellers will not need a separate application to qualify; eligibility will depend on account standing and regulatory requirements.

Square’s initial announcement did not disclose a cap on balances that will earn the 3.5% rate and did not tie the rate to an external benchmark. The company also did not provide forecasts for how many sellers will opt in or how much deposit volume might shift to its platform.

Square described the offering as part of its effort to expand financial services for merchants. The company, which is part of Block Inc., has previously added lending, checking-like features and other cash management tools for sellers.

The announcement follows a period in which banks and fintech firms adjusted deposit products as benchmark interest rates rose and competition for small-business customers increased. Some payment platforms and fintech firms have begun offering higher interest on business balances or integrated treasury services to attract merchant customers.

Square plans to provide more details about eligibility and account terms in follow-up communications to sellers on its platform.