Varo, founded in 2015, is one of the many online banking platforms available to today’s bankers who are ready to give up the brick-and-mortar shops.
Like other online-only banks, Varo offers savings and checking accounts with low fees and high interest-earning rates, making it an attractive alternative to traditional banks. Unlike most competitors, the company also owns and operates its own regulated bank, Varo Bank, N.A., rather than partnering with a backing bank.
The bank doesn’t offer small business banking, traditional credit cards, loans or investing. So it’s not a great fit if you’re looking for a comprehensive financial institution. But its simplicity, sleek design and straightforward perks make it a perfect fit for a simple personal bank account.
Our Varo Bank review gives you everything you need to know about the bank’s options to decide whether it’s the right place for your money.
Varo’s checking or spending account is called the Varo Bank Account. It’s the first stop if you want to be a Varo member and access any of its financial products. You have access to the savings account once you open the checking.
Varo Bank Account
Best for No-Fee Online Banking
- No monthly maintenance fees
- Cash Deposit via Green Dot
- Free withdrawals at 55,000+ Allpoint ATMs
Varo’s FDIC-insured online bank account carries no monthly maintenance fee or minimum balance, and no overdraft fees. You can get paid up to two days early when you set up direct deposit. Unlike many online accounts, this one lets you manage cash easily with a network of free ATMs for withdrawals and cash deposits through Green Dot locations at CVS, Walmart or Walgreens.
Varo Bank Account
More Information About Varo Checking Account
Varo’s checking account is pretty standard among online checking accounts. You’ll pay almost no fees, get access to nationwide ATMs and get your paycheck up to two days ahead of payday with direct deposit (depending on when the payer runs payroll).
Less typical for online accounts is the option to deposit cash over the counter at Green Dot locations, which you can find in CVS, Walmart and Walgreens. That’s a major plus for folks who work with a lot of cash and aren’t served by most online banks.
The biggest benefit to opening a Varo Bank Account is the additional perks you get access to, including cash advance, credit building and cash back on your shopping.
Varo doesn’t provide overdraft protection. That means transactions will be denied if they’d take your account negative — it also means no overdraft fees. Instead of this kind of protection, Varo offers Varo Advance, which gives you access to an instant cash advance up to $100 when you need it for a fee between $0 and $5.
Varo Savings Account
Best for Automated High-Yield Savings
- Must open Varo bank account first
- Automated savings tools
- No minimum opening deposit
The Varo Savings Account doesn’t have to be flashy to sell itself: An APY up to 5.00% and easy-to-set-up automated saving give savers everything they need. That’s all with no monthly fees. If you open a Varo Bank Account, you also get access to its Savings Account, a high-yield account with automated saving features connected to your Varo Bank Account.
Varo Savings Account
More Information About Varo Savings Account
You can open the account with no minimum balance to obtain 3.00% APY. Your rate will skyrocket to 5.00% APY for balances of $5,000 or less for any month you meet these requirements:
- Direct deposits of $1,000 or more.
- Positive Bank Account and Savings Account balances at the end of the month.
- Additional balances above $5,000 will earn Varo’s base 3.00% APY.
Varo also offers two automatic savings tools to help you build a cushion without thinking about it:
Save Your Pay lets you automatically save a percentage of each direct deposit you receive.
Save Your Change is Varo’s round-up program, which rounds each transaction you make to the nearest dollar and transfers the change to your Savings Account.
Other Varo Products
When you become a Varo customer by opening a bank account, you also get access to these benefits.
Through the Perks program, you can earn cash back for shopping with program partners when you pay with your Varo debit card or credit card.
Perks deals are limited to select merchants, and you’ll see which deals are available through the Varo app. The amount you can earn varies, but Perks deals are available at up to 6% cash back.
Rewards are automatically deposited into your Bank Account when the amount reaches $5.
In lieu of overdraft protection, Varo helps you stretch to your next paycheck with Varo Advance. Through the program, you can request up to $100 through the app when you need it for a purchase and get an instant cash advance to your Bank Account.
You can qualify after being a Varo customer in good standing for at least 30 days, and you’ll have to have at least $1,000 in direct deposits within the past 31 days.
Cash advance amounts and fees are:
- $20: $0 fee
- $50: $3 fee
- $75: $4 fee
- $100: $5 fee
There’s no interest for the advance, and you repay it with an automatic payment from your Bank Account within the app within 30 days. Once you repay an advance, you can be eligible for another.
Varo Believe is a credit builder credit card available only to Varo Bank customers.
The secured credit card comes with no minimum security deposit, no annual fee and no interest. When you open the card, you’ll get a Varo Believe account that works like a debit account. You’ll deposit any amount you want into the account, and that becomes your card’s credit limit.
Use your card like any other credit card wherever Visa is accepted, and repay your balance by the due date to build a credit history that Varo reports to credit bureaus.
The money in your Varo Believe accounts secures your card against missed payments, but that doesn’t let you off the hook. Late payments could be reflected on your credit report and lose you the ability to use the card.
To qualify for a Varo Believe account, you have to have:
- At least two direct deposits of at least $500 in the past 90 days.
- An active Varo Bank Account without a negative balance or an overdue Varo Advance.
You have to apply for the card even after you meet these requirements, but applying doesn’t affect your credit score like applying for another credit card could.
Varo Bank Fees
Like most online bank accounts, Varo cuts fees wherever possible. You pay no monthly maintenance fee (with no balance requirements), no overdraft fees, no foreign transaction fees, no fees to transfer between accounts and no fees at Allpoint ATMs.
You can withdraw or deposit cash into your Varo Bank Account at Green Dot locations. Withdrawals are free, but you’ll pay a $2.50 fee for deposits plus any Green Dot fees, which can be $4.95 each for both withdrawals and deposits. You’ll also pay a $2.50 fee for a withdrawal at an out-of-network ATM (in addition to any fee the ATM’s owner charges).
Varo Customer Experience
Although online-only banks do, by definition, lack the convenience of physical locations, Varo offers a live, U.S.-based customer service hotline. You can also send an email or chat on the app if you’d rather avoid the phone.
Varo’s customer service is available via chat, phone or email.
Chat: Via chat feature in the Varo app
Phone: 1-800-377-8276 Monday through Friday, 10 a.m. to 6:30 p.m. ET
Email: [email protected]
Varo Bank also works with Zelle® for money transfers to folks who user other banks. However, Varo does get a bit of a ding compared to brick-and-mortar institutions for its lack of free cash deposits.
And while its network of ATMs offers good U.S. coverage, in-network international ATMs are limited to only these countries:
- The United Kingdom
- Puerto Rico
Varo’s app enjoys high ratings from both Apple and Android users: 4.7 stars on the Google Play store, with more than 40,000 reviews, and 4.7 stars on the App Store with more than 14,000 reviews.
The app gives you an easy bird’s-eye view of your bank account and plays well with Google and Apple Pay. Varo’s app also features a Perks tab where you can find deals and services from Varo partners, and even jobs that could help you earn and save money.
Pros and Cons of Varo
Varo Bank is a convenient and low-cost alternative to a major, sticks-and-bricks bank that may charge a rash of fees in return for their services. However, it’s not the right alternative for everyone. Our pros and cons might help you decide if Varo is the right bank for you.
- No monthly fees or minimum balances, no overdraft fees and no foreign transaction fees
- Early direct deposit
- Cash advance options
- 3.00% to 5.00% APY on savings
- Credit builder credit card
- Fees for cash deposits
- No small business banking or loans
Frequently Asked Questions (FAQs) About Varo
Here are our answers to commonly asked questions about banking with Varo.
Varo Bank is a legitimate bank that operates an online banking app backed by its own FDIC-member nationally chartered bank, Varo Bank, N.A. Unlike most online banking platforms, which rely on partner banks, Varo owns its own financial institution, so you always know exactly who you’re doing business with.
Is Varo Better than Chime?
Varo and Chime offer similar online banking services: Each offers a checking account, a savings account, early payday, cash advances, credit builder accounts, free ATM networks and automatic savings tools. Neither charges monthly fees. Varo’s 5.00% APY is far and above almost all competitors, including Chime’s 2.00%. Chime’s overdraft protection covers you up to $200 (compared with Varo’s $100 max cash advance) and comes with lesser requirements to qualify.
Who is Varo Bank Owned By?
Varo is a San Francisco–based financial technology company that owns and operates both the Varo Bank account app and Varo Bank, N.A., member FDIC. The company was co-founded by Colin Walsh, now its CEO; and Kolya Klymenko, the company’s former CTO. The company is funded by 24 investors, according to Crunchbase, with the most recent being The Rise Fund and Gallatin Point Capital.
Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers and digital media. Information from former Penny Hoarder contributor Jamie Cattanach is included in this report.