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Varo vs. Chime: Which Is Better for You?
Varo and Chime both have high interest on savings accounts, but their products and services have a few differences.
Chanelle Bessette is a personal finance writer at NerdWallet covering banking. She previously worked at Fortune, Forbes and the Reno Gazette-Journal. She is also a spokesperson for the banking team, and her expertise has appeared in The New York Times, Vox and Apartment Therapy.
Sara Clarke is a Banking editor at NerdWallet. She has been an editor and project manager in newsrooms for two decades, most recently at U.S. News & World Report. She managed projects such as the U.S. News education rankings and the Best States rankings. Sara has appeared on SiriusXM Business Radio and iHeartMedia’s WHO Newsradio and has been quoted in The Salt Lake Tribune, The St. Paul (Minnesota) Pioneer Press and other outlets. She is based near Washington, D.C.
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Varo and Chime have comparable offerings with a few key differences. Varo is a bank, and Chime is a neobank — an online-only financial service company that partners with a bank to provide account insurance.
Here’s how the two companies compare with each other.
Snapshot comparison
Checking account
No monthly maintenance fee or minimum balance requirement for either Varo or Chime.
Varo and Chime both have early direct deposits (up to two days early).
Cash deposits at Varo and Chime could be pricey, although cash deposits at Walgreens are free with Chime.
Savings account
With Varo, customers can earn up to 5.00% annual percentage yield on balances up to $5,000 when certain conditions are met. Alternatively, customers can earn 3.00% APY without meeting those conditions or for balances over $5,000.
Chime offers a 2.00% APY on its High Yield Savings account.
Overdrafts, ATMs and customer service
Chime’s SpotMe® overdraft service allows customers to overdraft up to $200 with no fee if they meet some account requirements.
Varo doesn’t allow overdrafts, but it has a cash advance program.
Varo customers have access to more than 55,000 fee-free Allpoint ATMs.
Chime customers can access more than 60,000 fee-free MoneyPass, Allpoint and Visa Plus Alliance ATMs.
Varo and Chime are both online-only and don’t have branches.
Varo and Chime both have strong mobile app ratings.
Choose Varo if:
You want a stellar interest rate on savings and can meet the requirements to get there.
Choose Chime if:
You want a strong interest rate on savings and a flexible overdraft service.
NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
Varo Bank Account. The Varo Bank Account has no monthly fees or minimum balance requirements. In addition, customers have access to the Allpoint ATM network, which has more than 55,000 free ATMs where customers can withdraw cash. However, depositing cash is more complicated; Varo customers have to go to a Green Dot retailer such as Walgreens or Safeway and may be charged a fee of up to $5.95. Customers can also get their paychecks up to two days early with direct deposit.
NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
Chime Spending Account. Chime doesn’t charge monthly fees or require a minimum balance on its Spending Account. It also has a savings program where customers can round up their purchases to the nearest dollar and save the difference. In addition, Chime customers can make fee-free withdrawals at more than 60,000 nationwide ATMs. Chime is also part of the Green Dot network, so customers can make cash deposits at certain retailers for a fee or at Walgreens for free.
See more information from Chime
Chime says: "Once the retailer accepts your cash, the funds will be transferred to your Chime Checking Account. Cash deposit fees may apply if using a retailer other than Walgreens and Duane Reade."
"Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account."
"Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date."
"Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM."
Savings
Varo Savings Account. Customers start at a baseline of 3.00% APY, but they can earn 5.00% on up to $5,000 if they have $1,000 or more in direct deposits per month and maintain a positive checking (Varo Bank Account) and savings balance at the end of the month. Varo has two automatic savings programs: the first allows customers to take a percentage of the direct deposits in their checking account and transfer it to their savings. The other program enables customers to save upon making a purchase. Varo will round up your purchase to the nearest dollar and transfer the change into your savings account.
Chime High Yield Savings. Chime’s free savings account has a 2.00% APY as long as you have a balance of at least $0.01. Chime also has two automatic savings programs: a roundup program for purchases made with a checking account debit card and a program that saves 10% of direct deposits of $500 or more from your checking account into your savings account. Note that a Chime Checking Account is required to be eligible for a Savings Account.
See more information from Chime
Chime says: "The Annual Percentage Yield (“APY”) is variable and may change at any time. The disclosed APY is accurate as of May 22, 2023. No minimum balance required. Must have $0.01 in savings to earn interest."
"There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account."
Banking experience
Varo and Chime are online-only, which means you’re out of luck if you prefer in-person service. However, Varo has extended weekday and weekend phone support hours and ways to contact customer support via email and Twitter, and Chime is available through chat, email and phone 24/7 as well as on Twitter.
Varo and Chime also have high mobile app ratings in the Google Play and App Store marketplaces.
Overdrafts
Varo. Varo doesn’t let overdrafts happen: If a customer tries to make a transaction that would create a negative balance in their account, then Varo declines the transaction. If you need some breathing room between paychecks, you can use the Varo Advance program, which allows you to get a cash advance of up to $100 for a fee of up to $5.
Chime. Chime doesn’t charge overdraft fees. Instead, it has an overdraft program called SpotMe®, where customers can overdraft up to $200 if they make at least $200 in direct deposits per month.
See more information from Chime
Chime says: "Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC."
"Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions."
4.20%SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) on savings balances (including Vaults) and 1.20% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.20% APY for savings. Members without direct deposit will earn 1.20% APY on all account balances in checking and savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 04/24/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
4.75%Annual Percentage Yield (APY) is accurate as of 05/09/2023. APY is variable and subject to change at any time without notice. No monthly service charge. No minimum balance requirement. Must fund with 15 days of opening account.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
4.50%Annual percentage yield (variable) is as of 5/8/23. 5.00% APY with a $75K deposit or 4.75% APY with a $25K deposit. New customers only with qualifying deposit. Terms apply.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
5.10%The annual percentage yield is effective as of Friday, May 19, 2023. APY is a fixed rate and a $1,000 minimum balance is required. Bask Bank will pay this rate and APY through your CD maturity date. Fees could reduce the earnings on your account, and an early withdrawal penalty may be imposed for early withdrawal. If your CD is not funded with at least $1,000 within 10 business days after the date the account is opened, it will automatically be closed. Read the full terms here: https://www.baskbank.com/terms-and-disclosures.pdf
3.30%Your annual percentage yield can be as high as 3.30% based on the following combined rate rewards: direct deposits (not including intra-bank transfers from another account) totaling $1,500 or more each month will earn 0.40%. A qualifying direct deposit is required for the remaining interest rate qualifications to apply. Ten (10) point-of-sale transactions per month using your Rewards Checking Visa® Debit Card for normal everyday purchases with a minimum of $3 per transaction, or enrolling in Account Aggregation/Personal Finance Manager (PFM) will earn 0.30%; maintaining an average daily balance of at least $2,500 per month in an Axos Self Directed Trading Invest account will earn 1.00%; maintaining an average daily balance of at least $2,500 a month in an Axos Managed Portfolio Invest account will earn 1.00%; and making a monthly payment to an open Axos Bank consumer loan (commercial and business loans excluded) via transfer from your Rewards Checking account will earn a maximum of 0.60%.
Monthly fee
$0
Money market accounts pay rates similar to savings accounts and have some checking features.
Money market accounts pay rates similar to savings accounts and have some checking features.
