What you can and cannot do with a PayPal gift card

A PayPal gift card loads money into a PayPal account, not directly into a bank account. You cannot transfer the card's balance straight to your bank—but you can move the money from PayPal to your bank in a few steps. The path depends on whether the card is already linked to an existing PayPal account or whether you need to create one first.

PayPal gift cards come in two forms: physical cards you receive in the mail, and digital codes you get by email. Both work the same way: you redeem the code or activate the card through PayPal's website or app, and the money sits in your PayPal balance. From there, you can transfer it to a linked bank account, use it to pay someone else, or spend it online anywhere PayPal is accepted.

The catch is timing. Transfers from PayPal to your bank account take 1 to 3 business days, and PayPal charges no fee for standard transfers. If you need the money faster, PayPal offers an instant transfer option for a small fee (usually 1.75% of the amount), which lands in your account within 30 minutes.

Key Takeaways

  • PayPal gift card money goes into your PayPal balance first; you then transfer it to your bank account as a separate step.
  • Standard transfers to your bank take 1 to 3 business days and are free; instant transfers cost 1.75% and arrive within 30 minutes.
  • You must have a PayPal account and a linked bank account or debit card before you can move money out.
  • If the gift card was sent to you by someone else, you may need to create a new PayPal account or add it to an existing one depending on the card type.

Redeeming the gift card into your PayPal account

Before you can transfer money to your bank, the gift card balance must be in your PayPal account. If you already have a PayPal account, log in to the website or app. If you do not, create one at paypal.com—you will need an email address and a password.

For a physical PayPal gift card, go to the "Wallet" section of your account and select "Add a Card." Enter the 16-digit card number, expiration date, and CVV from the back of the card. PayPal will verify the card and add the balance to your account within a few minutes.

For a digital gift card code, you will receive an email with a redemption link or a code. Click the link or go to paypal.com/redeem, enter the code, and confirm. The money appears in your PayPal balance immediately. If you do not have a PayPal account yet, the redemption process will prompt you to create one.

Linking a bank account to your PayPal account

To transfer money from PayPal to your bank, PayPal must have your bank account information on file. Go to "Wallet" in your account settings, then select "Link a Bank Account." You will need your bank's routing number, your account number, and the account type (checking or savings).

PayPal will make two small test deposits to your bank account—usually $0.01 and $0.02—within 1 to 2 business days. Check your bank statement for these deposits, then return to PayPal and enter the amounts to confirm the account. Once verified, your bank account is linked and ready for transfers.

If you do not want to wait for test deposits, you can link a debit card instead. This is faster—PayPal verifies the card immediately—but transfers to a debit card may have different limits or fees depending on your account type. Check PayPal's current policy before choosing this route.

Transferring money from PayPal to your bank account

Once your bank account is linked and verified, transferring the gift card balance is straightforward. Log into PayPal, go to "Wallet," and select "Transfer Money." Choose "Transfer to Your Bank" and enter the amount you want to move. PayPal will show you the arrival date and any fees before you confirm.

Standard transfers are free and take 1 to 3 business days. The money lands in your bank account as a deposit from PayPal. Instant transfers cost 1.75% of the amount (with a minimum fee of $0.25) and arrive within 30 minutes, though they may take up to 2 hours during peak times.

You can transfer your entire gift card balance at once or in smaller amounts over time. There is no limit on how many transfers you can make, but PayPal may place temporary holds on your account if you transfer very large amounts or if your account is new.

What happens if your PayPal account is limited or restricted

PayPal sometimes limits accounts—usually when there is unusual activity, a dispute, or a new account with a large transfer. If your account is limited, you will see a message when you try to transfer money. You may be asked to confirm your identity, resolve a dispute, or wait a set number of days before transfers are allowed again.

If your account is limited, contact PayPal's Resolution Center to see what is required. Most identity confirmations take a few hours; disputes can take longer. Until the limit is lifted, your money stays in your PayPal balance and cannot be transferred to your bank.

To avoid limits on a new account, do not transfer large amounts immediately after redeeming the gift card. Wait a day or two, and transfer in smaller increments if possible. If you have an existing PayPal account with a good history, limits are less likely.

Using the gift card balance without transferring to your bank

You do not have to transfer the money to your bank if you do not need it there. PayPal balance can be used to pay anyone with a PayPal account, to send money internationally, or to pay at millions of online stores that accept PayPal. You can also use the PayPal Cash or PayPal Cash Plus debit card to spend your balance at ATMs and in stores.

If you choose to get a PayPal debit card, you can withdraw cash from ATMs using your PayPal balance directly, without transferring to your bank first. There is no fee for ATM withdrawals at MoneyPass or Allpoint ATMs; other ATMs may charge a fee from the ATM operator.

Keeping money in PayPal is useful if you plan to send it to someone else, make online purchases regularly, or want to avoid bank transfer delays. But if you need the money in your actual bank account for bills or savings, a transfer is the most direct route.

Frequently Asked Questions

Can I transfer a PayPal gift card to someone else's bank account?

No. Once you redeem a gift card into your PayPal account, the money is yours. You can send it to another person's PayPal account or bank account using PayPal's "Send Money" feature, but you cannot transfer the card itself. The recipient would need their own PayPal account to receive the funds.

What if I do not have a bank account—can I get the money another way?

Yes. You can withdraw cash from an ATM using a PayPal debit card, or you can use the PayPal balance to pay bills, send money to others, or shop online. If you need cash and do not have a bank account, the debit card is your fastest option.

How long does it take for money to show up in my bank account after I request a transfer?

Standard transfers take 1 to 3 business days. Instant transfers arrive within 30 minutes to 2 hours. Weekends and holidays may add time to standard transfers. PayPal will show you the expected arrival date before you confirm the transfer.

Will PayPal charge me a fee to transfer the gift card money to my bank?

Standard transfers are free. Instant transfers cost 1.75% of the amount, with a minimum fee of $0.25. No other fees apply to transfers to a linked bank account. Transfers to a debit card may have different fees—check PayPal's current rates.

What if the gift card code does not work when I try to redeem it?

Check that you entered the code correctly, including hyphens or spaces. If the code still does not work, the card may have expired, been used already, or have a technical issue. Contact PayPal's customer service with the code and the email address where you received it, and they can investigate.