Elon Musk’s X Money launches with 6% APY and up to $10 million FDIC coverage — should your bank be worried?

X owner Elon Musk had promised a payments app — X Money — since he renamed Twitter, and it went live to more paying subscribers in late June.

X Money is leading with two big numbers: a 6% interest yield on your cash and up to $10 million in federal insurance, which is about 40 times what a normal account carries.

For now, it’s not clear whether X will become a threat to your bank, or if it’s just another place to put your money.

What you actually get with X Money

On June 25, X started rolling out X Money to a subset of U.S. Premium+ subscribers, and Dhruv Batura, who runs the product, called it a small release meant to catch problems before a wider launch.

X says it offers 6% on your balance with no minimum, 3% cashback when you spend, no foreign transaction fees and free ATM withdrawals. It also comes with a metal Visa debit card that uses your @handle. You can send money to other people on X almost like you’re replying to a post, and one user tested that on launch day by sending Musk $25, which Musk publicly confirmed had gone through.

The card runs on Visa, which signed on as X’s first partner in January 2025. But the more important detail is the one you barely notice: X is not a bank, and it doesn’t have a banking license. Your money sits at Cross River Bank, a New Jersey-based lender that has long powered fintech apps. So you get X’s branding and the polished card, while Cross River handles the regulated banking side.

Where the $10 million really comes from

Standard FDIC coverage is $250,000 per person, per bank. So if you open a plain X Money account, that’s what you get — a quarter million, same as anywhere and not $10 million.

The bigger number comes from something called the X Cash Sweep Program, and it’s only for Premium+ subscribers. Instead of keeping all your cash at Cross River, the program spreads it across a network of partner banks and keeps each slice under the $250,000 limit, so every piece stays fully insured.

Stack enough banks together and the total coverage can climb to around $10 million. According to a video posted by Benji Taylor, head of design at X and xAI, deposits will be held at Cross River “and at other FDIC-insured institutions.”

This kind of sweep setup is not new — wealthy people have used them for years. But the important thing is what that insurance actually covers. It protects your money if one of the banks fails. It does not protect you if X Money itself runs into trouble. A bank failing and an app failing are not the same thing, and only one of them falls under FDIC coverage.

Why the 6% is the part to watch

The 6% interest yield is the loudest promise here. Even the best high-yield savings accounts in the country top out around 4.5% to 5% right now, according to Fortune, and many people are stuck at that 0.38% average. The Fed’s benchmark rate is only about 3.5% to 3.75%, so the obvious question is how X can pay 6% when the banks behind it can’t safely earn that much themselves.

U.S. Senator Elizabeth Warren asked Musk that same question in an April 14 letter. As the ranking member of the Senate Banking Committee, she wanted to know how X Money would “generate revenue sufficient to pay that yield.”

She also flagged Cross River’s deceptive record regarding FDIC enforcement actions and pressed X on how it would tell customers, in plain terms, that the insurance won’t save them if X Money itself goes down.

For now, treat 6% like a promo, not something you can necessarily count on forever.

Should your bank actually be worried?

Not tomorrow, and not everywhere. X Money is live in 41 states and Washington, D.C., where X has the licenses to move money — and it’s still walled off behind a paid subscription. Two of the biggest markets in the country, New York and Massachusetts, are out for now because X hasn’t cleared their regulators yet.