X Money stops interest payments for New Yorkers, offers $300 bonus instead
New York blocks X Money interest payments
The New York Department of Financial Services (NYDFS) told X Money, part of Elon Musk’s X platform, that it cannot pay interest on deposits held by New York residents. X Money is not a bank and does not hold a banking license in the state.
In response, X Money began offering New York users a $300 “direct deposit bonus” as temporary compensation. The company stated this bonus is not interest or an annual percentage yield (APY).
How X Money describes its service
X Money markets its product to New York customers as a way to “earn yield,” get cashback, send payments, and access other financial services. It holds funds in a “stored value account,” which the company says allows customers to “obtain interest” through September 30, after which they can receive the $300 bonus.
The company’s own terms clarify that X Payments, the entity behind X Money, is not a bank, is not insured by the Federal Deposit Insurance Corporation (FDIC), and does not take deposits. However, the X Money homepage mentions “deposits” multiple times.
Regulatory status in New York
NYDFS approved X Payments as a money transmitter—not a bank—in New York on July 23, 2026. Money transmitters are businesses that move money for the public but do not function as banks. X Money’s license page confirms it is not a bank and lists its non-bank license number.
What is confirmed
- NYDFS told X Money it cannot pay interest on deposits for New York residents.
- X Money is offering a $300 bonus to New York users as interim compensation.
- X Money is not a bank and does not hold a banking license in New York.
- X Payments is licensed as a money transmitter in New York, effective July 23, 2026.
- X Money’s terms state it does not take deposits and is not FDIC-insured.
Why this matters
X Money’s inability to pay interest highlights the limits of non-bank financial services. Without a banking license, companies like X Money cannot offer traditional interest-bearing accounts, even if they market similar features.
