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Best-in-class savings account APY and no fees make Varo Bank a great financial institution to bank with.
9/10
Cost
9/10
Ease of use
9/10
Features
8.5/10
Services
9/10
We all have bills to pay, but wouldn’t it be nice if they could at least wait for payment until after our payday? Varo Bank may have the solution for this all-too-common problem. This online bank offers options for advanced access to direct deposits and numerous other features that might help you meet your financial goals, month-by-month and little by little.
There has to be a catch, though, right? Our Varo Bank review examines this mobile banking option in more detail to help you decide if it is worth considering.
Varo Bank is an online-only mobile banking option. It is considered the first all-digital bank in the country. The premise behind Varo is that because of the lack of physical branches, the savings are passed on to the customers.
Varo may sound like a simple and straightforward banking solution, but its beginnings were anything but easy. Founded in San Francisco in 2015, Varo was the first fintech company without a bank charter, which meant it was limited in its impact on the banking industry.
It wasn’t until 2020 that Varo was finally granted a full bank charter from the Office of Comptroller of the Currency (OCC). Varo became the first fintech ever to receive this. Since then, Varo’s mission has remained the same: to provide financial services to everyone, regardless of net worth or accessibility.
Varo is digital-only, so you must download the app or sign up online to use its many features.
The application process
You can sign up for either a checking or savings account or both. The application process is relatively simple. You provide your basic information, including your social security number and a copy of your government-issued I.D., and you’re on your way. And since there’s no minimum deposit requirement or fee to maintain the account each month, you can choose when to start banking.
The checking account
The Varo bank account works like almost all other traditional bank accounts. You can make cash withdrawals, transfers, deposits, and payments. If you’re a bank account holder, you will be issued a Varo Bank Visa debit card, which can be used anywhere Visa is accepted.
You will have to use the app to make deposits into your account. You can also connect other financial institutions to the app, such as Apple Pay, Google Pay, PayPal, Cash App, or Venmo, which allows you to manage money and transfer as needed.
When you need to withdraw money, you can do so from any ATM, but it will be fee-free if you use one within the network. Currently, this includes over 40,000 AllPoint locations with no ATM fees. You can deposit a physical check with the mobile app, but cash deposits require using the Green Dot Reload @ the Register, available at over 90,000 locations.
When you open a Varo Savings account, you will be eligible for the 3.00% annual percentage yield (APY) without any minimum deposit or balance.
But this is only the beginning. Receive $1,000 or more in direct deposits during a qualifying period and keep a daily savings balance of $5,000 or less the entire calendar month. You will be eligible for a 3.00% - 5.00% APY.
Varo offers two programs to encourage further savings. The first is the Save Your Pay program. When enrolled, it takes a percentage of your direct deposit and transfers it to your savings account for automatic savings, and you have complete control over the percentage.
The Save Your Change program rounds up every transaction to the nearest dollar and puts the difference into your savings account.
Varo Believe Credit Builder
In addition to the banking and savings account options, Varo offers a secured credit card, the Varo Believe Credit Builder. A secured credit card means you must make a security deposit, and your credit line equals your deposit amount.
The Varo Believe credit card doesn’t have an annual fee or an interest rate (since it’s a secured option). When you make on-time payments, the information is reported to the three credit bureaus (Experian, Equifax, and TransUnion), which can help you build your credit profile and improve your credit score.
How much does using Varo Bank cost?
Opening a checking or savings account is free of charge, and there’s no minimum requirement either. Varo doesn’t charge monthly maintenance fees or use AllPoints ATMs as long as they are within the network. If you use a non-Allpoint ATM, you will be charged $3 plus any other fees the ATM operator charges. You can also send money instantly to other Varo account holders free of charge.
Certain types of transactions incur fees. For example, if you request a cash advance of $50 or more, a minimum charge of $4 will apply. International wire transfers also incur fees.
Varo Bank features
Varo offers several features, including no minimum balance, no hidden fees, and free in-network ATM usage.
Early direct deposit
If you meet the direct deposit eligibility requirements, you can get paid up to two days early. This is perfect when your bills and payday aren’t on the same schedule.
Higher APY on savings accounts
You’ll have access to a very competitive interest rate if you meet high-yield savings account qualifications.
Instant cash loan
Varo's feature allows account holders to request up to $250 as a cash advance. A few restrictions and applicable fees exist, such as having at least $800 in direct deposits within the last 30 days. But this could be an option if you need money in a pinch.
Send money instantly
Varo allows you to instantly transfer money to other Varo account holders without charging any fees.
Highly rated banking app
A mobile-only bank should have a convenient app for on-the-go account management. Varo has an option that has received positive reviews and high ratings and is available on both iOS and Android. The app allows you to view transactions, send money, request an advance, and access numerous other features.
Cashback rewards and partner offers
Varo has a fun program where you can earn up to 6% cash back by shopping with select stores using your Varo Bank Visa Debit Card or Varo Believe Card. You can keep up with your app earnings and cash out once you hit $5.
Account security
A Varo Visa Debit Card will be issued to you, and with it comes the Visa Zero Liability program - which guarantees you will not be held responsible for any unauthorized charges as long as you report the fraudulent activity immediately. FDIC also insures all bank deposits up to $250,000.
Chime is a fintech company like Varo. It’s neither a traditional bank nor a credit card company either. However, Chime partners with major banks like The Bancorp Bank or Stride Bank to provide credit card services so people can build or repair their credit. It offers a spending account, a savings account, and a credit-building option, all via a mobile app.
Aspiration is also a fintech company with both spending and savings account options. The biggest difference with Aspiration is the focus is centered on combating climate change. For example, the company uses no deposits to fund fossil exploration or production. The savings account is quite competitive, too. The basic option offers up to a 1% APY, while Aspiration Plus offers a 1.00% - 3.00% APY for the first $10,000 in savings.
Will downloading the Varo Bank app impact my credit score?
No, downloading the app does not have any impact on your credit report or credit score. If you decide to participate in the Varo Believe credit-building credit card program, your report has no hard inquiries. Still, the payment information is reported to the credit bureaus.
Does Varo Bank have overdraft fees?
No, there are no overdraft fees.
How much money can I withdraw from Varo Bank?
Varo Bank allows you to withdraw $1,000 per day from an ATM.
Is Varo a legit bank?
Varo Bank offers multiple advantages to traditional banks and financial institutions, but only if you are willing to work a little harder for your cash deposits. If you expect convenience with your checking and savings accounts, it’s hard to beat the features of the mobile banking app and online access for complete account management. The lack of monthly maintenance fees, no overdraft or late fees, or minimum balance requirements make this bank a budget-friendly option for anyone to access.
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Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.
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