Varo Bank Review: Low-Fee Online Checking & Saving Accounts

Banking
Updated: 21st Jul 2021
Written by Jordan Blansit
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Banking
July 8, 2021
Written by Jordan Blansit

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Varo Bank is a neobank that offers a boiled-down, online-only banking experience for those who prefer the simpler things in life.

With no monthly fees, strong savings rates, and a highly rated mobile app on both the App Store and Google Play, Varo makes online banking easy as pie.

Snapshot: Varo Bank Pros and Cons

Pros:

  • Tiered APY on savings accounts
  • No monthly fees or minimum balance requirements
  • Highly rated mobile apps
  • Access to thousands of fee-free ATMs in the Allpoint network
  • Up to $100 instant cash loan with Varo Advance

Cons:

  • No brick-and-mortar branches
  • Cash deposits only available via third-party retailers
  • Stringent requirements on tiered savings APY
  • 24/7 customer service not available
  • Varo to Varo transfer only available between Varo customers

What is Varo Bank?

Varo Bank is one in a wave of neobanks, sometimes called challenger banks, that’s tipping the traditional brick-and-mortar model on its head.

It comes with only two types of accounts – checking and savings – as well as no minimum balance requirements or overbearing fees.

Everything is done from Varo’s highly rated iOS or Android mobile app, including:

  • Signing up for an account
  • Paying your bills
  • Setting up direct deposit
  • Tracking your spending at both Varo and non-Varo accounts
  • Locking your card when it disappears (likely in the laundry, but who knows?)

Moreover, your funds are FDIC insured up to $250,000 per depositor.

And while many challenger banks require partner banks to secure your money, Varo Bank holds the distinction of being the “first mobile-centric national bank in U.S. history” to receive a national charter.

In other words, while they remain in partnership with Bancorp Bank, Varo can hold their own deposits now.

What Does Varo Bank Offer?

Despite its lack of branches, Varo Bank offers all the essentials in banking – assuming your needs are relatively simple.

Every checking account comes with a chip-enabled Visa debit card at no extra cost, which you can add to Apple Pay, Samsung Pay, or Google Pay for both online and in-store transactions.

When it comes to adding money to your account, Varo accepts ACH transfers, direct deposits – with funds available up to two days early! – check deposit via the app, and even cash deposits. However, this last option comes with a few catches.

First, you have to use a Green Dot network retailer such as CVS, Walgreens, or 7-Eleven. Second, you can only add $500 to $1,000 per day, depending on the retailer. And third, every cash deposit comes with a $5.95 fee.

That said, this is one of the few fees Varo Bank charges. For instance, Varo Bank is a member of the Allpoint ATM network, which means you have access to fee-free withdrawals at over 55,000 ATMs on three continents.

Additionally, there are no foreign transaction fees on debit purchases or ATM withdrawals, nor monthly or overdraft fees.

Additionally, Varo offers such perks as: tiered APY on your savings accounts, unlimited withdrawals and transfers (up to $5,000 per transfer and $10,000 per month), and a cash advance program.

Plus, Varo bank accounts come with two automated savings programs:

  • With Save Your Pay, you can opt for a percentage of your direct deposit to automatically deposit into your savings account – before you can get your hands on it.
  • The second, Save Your Change, rounds up all banking transactions to the nearest dollar and transfers the balance to your savings to pad out your rainy-day fund.

>> Want to Compare Options? Explore the Best Online Banks

Varo Bank Review: Products You Can Trust

The Varo Bank Account

The Varo Bank Account is this neobank’s checking account. It comes with no monthly maintenance fees or minimum balance to open or maintain your account.

All you need to sign up are a government-issued ID, your Social Security Number, and a device that can run Varo’s mobile app. (Note that you also must be 18 or older.)

While Varo’s bank account is a run-of-the-mill offering, it does promote access “up to two days earlier” for all employer- and government-initiated direct deposits.

Additionally, you can send money to other Varo users fee-free with its Varo-to-Varo service. (No wire transfers available at this time).

Plus, like any good debit account, the Varo Bank Account comes with an EMV chip-enabled Visa debit card.

Savings Account

Once you open your bank account, you’re eligible to open a Varo Savings account.

There’s no minimum deposit or account balance to get started, and you’re eligible to earn interest with as little as one cent in your savings account.

On top of the Save Your Pay and Save Your Change tools mentioned above, Varo’s savings account comes with a unique tiered APY structure.

All savings accounts are eligible to earn a competitive 0.2% APY on deposited funds. But Varo offers a chance to earn a substantially higher APY of up to 3% – so long as you meet a few monthly requirements.

Within the same qualifying period (calendar month), you must:

  • Maintain a daily savings balance of no less than $0 and no more than $5,000 for the entire month
  • Receive at least $1,000 or more per month from qualifying payroll or government sources
  • Make at least five eligible debit card purchases

If you can hold to these restrictions, maintaining just $1,000 in your savings account can net you $30 per year in interest.

But if you hold more than $5,000 or less than $0 per month in your savings account (or fail any other qualifications), you’re back to the usual 0.20% APY.

Varo Believe

Varo Believe is the company’s latest offering, and it’s a good one. This new credit card offering comes with no monthly fees and no APR, as well as monthly reporting to all three major credit bureaus to build your credit.

Here’s how it works – or will, once it updates from “coming soon” to “finally here.”

You apply for the Varo Believe Program and receive your new EMV-enabled credit card. Then, you choose how much money you want to set aside each month from your Varo Bank Account into the Varo Vault.

These funds will pay off your credit card in full, with your Varo Bank Account balance determining your credit card limit. (Up to $10,000 per billing cycle.)

Once that’s set, it’s time to start making your purchases on credit and paying it back immediately from your set-aside funds.

In the process, you’ll build your credit, incur no fees, and pay no monthly APR – all while monitoring your rising credit score on the Varo Bank app.

Of course, there are qualifications to apply. Chiefly, you’ll need a minimum of two direct deposits totaling $1,000 or more within the past 90 days.

You’ll also need to ensure your account remains active with no negative balances in the same three-month period.

Varo Advance

Varo Advance is Varo’s way of providing a small financial cushion to help you avoid overdrawing your account.

With this program, you can enjoy instant access of up to $100, which must be repaid within 30 days.

This program does come with some requirements and limitations:

  • Your account must be active and at least 30 days old
  • You must have had $1,000 in direct deposits to your Varo accounts within the past 31 days
  • You can only have one outstanding advance at a time

Additionally, using this program costs $0 to $5 per advance, depending on the amount.

Varo Bank Features and Benefits

Easy Signup Process

Signing up for Varo Bank is easy. To get started, all you need to do is download the Apple or Android mobile app and follow the signup process.

To begin using your money, you can set up external transfers, direct deposits, or visit an eligible Green Dot network register to add cash to your account.

No Monthly, Hidden, or Overdraft Fees

As a neobank, Varo Bank cuts out a lot of the wallet-gouging fees for which big banks or notorious.

That means no monthly or hidden fees – and no overdraft fees.

No Fee Overdraft

Speaking of no overdraft fees: Varo Bank’s No Fee Overdraft program lets you overdraw your checking account up to $50 when making a debit card purchase.

You have 30 days to pay the funds back (funds will automatically be pulled from your next direct deposit).

This program comes with no fees or interest, but to qualify, you must:

  • Enroll in No Fee Overdraft in the Varo app
  • Receive payroll or government direct deposits of at least $1,000 per month
  • Make five debit purchases per month

No Credit Check

No credit card, no credit check. Simple!

That even applies to the Varo Believe Program – because you can’t spend more than what you have deposited, Varo won’t let you make purchases “on credit” like a traditional credit card.

Free Cash Withdrawals

With Varo Bank, you can access more than 55,000 fee-free Allpoint ATMs to pull cash from your account.

Withdrawals at non-Allpoint ATMs cost $2.50 plus operator fees. Additionally, you can get cash back from some store registers when you make debit purchases.

Note that cash withdrawals are subject to limits: $750 per day at ATMs and $500 per day from eligible registers.

Moreover, you can’t take out more than $1,000 per day between the two withdrawal methods.

Varo Bank Debit Card

Varo Bank Accounts come with an EMV chip-enabled Visa debit card that you can add to Apple Pay, Samsung Pay, or Google Pay as part of your mobile wallet.

This card comes with a $2,500 spending limit per day or $10,000 per calendar month.

Plus, as part of the Visa network, you’ll enjoy the peace of mind that comes with qualifying for the Visa Zero Liability guarantee: if you notice any unauthorized charges on your card, you’re not responsible for payment.

And replacement cards are completely free! Unless you require expedited shipping.

Customer Service

As an online bank, Varo doesn’t have branches or in-person customer service of any kind.

That said, customer support is available by phone 8am to 9pm Eastern time Monday through Friday, and open weekends from 11am to 7pm. Their support team also responds to requests and questions via email and Twitter.

Who is Varo Bank Best for?

Varo Bank is ideal for mobile-centric customers in need of basic banking services or a high APY.

But keep in mind that there are a few eligibility requirements to maintain your 3% rate – if you can’t meet them, you might do better with a lower, but requirement-free, APY elsewhere.

How Does Varo Bank Compare to Other Online Banks?

#1. Varo Bank vs. Chime

Chime is another neobank that offers an online-only experience and a competitive APY.

But unlike Varo, it only has one savings rate – 0.50% – with no complicated rules. It also offers no monthly fees or minimum deposit (though it lacks in budgeting and small business banking tools).

Its mobile app is packed with automated savings and deposit features for users on the go, plus the bank boasts a network of 60,000 fee-free ATMs.

>> Learn More: Full Chime Bank Review

#2. Varo Bank vs. Aspiration

Aspiration is less a bank and more an online financial service provider that helps users be socially and sustainably conscious – you can even opt to plant a tree with every round-up.

Aspiration divides checking and savings into two eco-friendly plans with recycled-plastic debit cards.

Aspiration Plus costs $15 per month ($12.50 per month with annual payment), while Pay What Is Fair is donation-based.

That said, Aspiration is a little more comprehensive than Varo at the price, with $2 million in FDIC insurance per depositor and the option to invest in professionally managed funds or IRAs or make tax-deductible donations to a cause of your choice.

>> Learn More: Full Aspiration Bank Review

#3. Varo Bank vs. Current

Current Bank offers many of the same features as Varo, though they’re not identical.

For instance, Current offers fee-free overdraft protection up to $100, 15x points on debit purchases at participating merchants, multiple Current debit cards, and instant cash deposit at over 60,000 stores.

And this account is only free on some tiers – premium and teen accounts come with monthly fees, plus 3% foreign transaction fees.

>> Learn More: Full Current Bank Review

#4. Varo Bank vs. Ally Bank

Ally Bank is a full-service online bank that gives some neobanks – Varo included – a run for their money.

Ally comes with no monthly, ACH transfer, or statement fees, 0.50% APY compounded daily, 24/7 customer support, and 43,000 fee-free ATMs.

Plus, users can grow their wealth with IRAs, CDs, and money market accounts or take out home and auto loans. Plus, with Ally Invest, you can dabble in online stock trading.

Varo Bank FAQs

Is Varo Bank a Real Bank?

Yes! Varo Bank is not only a real bank, but in July 2020 it because the “first mobile-centric national bank in U.S. history” to receive a national bank charter. This allowed it to move its deposit duties from The Bancorp Bank to within its own network.

Is Varo Bank FDIC Insured?

Absolutely! Varo Bank is FDIC Insured. Varo accounts are protected up to $250,000 per depositor.

Does Varo Have Brick-and-Mortar Branches?

Nope! Varo Bank is entirely online.

Is Varo Bank Legit?

Varo Bank is a legitimate, FDIC-insured, deposit-holding online bank.

Is Varo Better than Chime?

Varo Bank offers a higher APY than Chime, as well as in-app budgeting tools. However, Chime’s 0.50% savings APY is still competitive compared to the playing field – and comes with no complicated rules to boot. Plus, Chime offers a comprehensive mobile app, automated savings, customer support, and 60,000+ fee-free ATMS.

Bottom Line: Varo Bank Review

Varo Bank is a convenient, monthly fee- and minimum-free neobank that offers basic checking services, a competitive savings APY, and multiple ways to automate your savings.

Paired with an expansive fee-free ATM network, EMV debit card, and highly rated mobile apps, it’s a great alternative for busy users with simple financial needs.

That said, if you’re shopping around for a second account to stash funds and earn a little interest on minimal activity, Varo Bank’s tiered APY may not be for you.

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Jordan Blansit
Jordan Blansit
Jordan is a freelance writer with an inexplicable predilection for investing and personal finance. When she’s not click-clacketing from the comfort of her living room, you can find her (or not) craftily avoiding human contact in the California redwoods or Oregon Siskiyous with her black cat, Bean.