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Varo Bank Review: Checking and Savings

Sept. 10, 2019
Banking, Banks & Credit Unions
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NerdWallet rating: 4.5/5.0

Where Varo shines:

  • No monthly fees, no overdraft fees.
  • Up to 2.80% APY savings account.
  • Tools to track spending across Varo and non-Varo accounts.
  • Get your paycheck early with direct deposit.

Where Varo falls short:

  • Cash deposits are through a third-party service that charges fees.

Where Varo shines:

  • No monthly fees, no overdraft fees.
  • Up to 2.80% APY savings account.
  • Tools to track spending across Varo and non-Varo accounts.
  • Get your paycheck early with direct deposit.

Where Varo falls short:

  • Cash deposits are through a third-party service that charges fees.

Where Varo shines:

  • No monthly fees, no overdraft fees.
  • Up to 2.80% APY savings account.
  • Tools to track spending across Varo and non-Varo accounts.
  • Get your paycheck early with direct deposit.

Where Varo falls short:

  • Cash deposits are through a third-party service that charges fees.

 

The bottom line

Varo

at Varo,

Member, FDIC

Varo is a mobile-only banking app with a hard-to-beat combo: free checking and high-yield savings. Neither account has overdraft or monthly fees or minimum balance requirements. Varo also includes a fee-free ATM network, budgeting tools and automatic savings programs. Since there are no branches, cash deposits are only available through third-party retailers that may charge a fee.

Best if: You’re looking for one place for free checking, a high savings rate and budgeting tools.


Read on for details on Varo’s checking, savings and more.

Checking: 4.5/5.0

Upsides:

  • No fees or minimum balance for Varo’s main bank account.
  • Free access to thousands of ATMs. Varo is part of the Allpoint network, which has over 55,000 ATMs worldwide, with about 42,000 of them in the U.S. If you use a non-Allpoint ATM, the ATM operator may charge a fee, but Varo won’t.
  • No foreign transaction fees. Unlike many banks, Varo doesn’t charge a fixed or percentage fee on ATM withdrawals or debit card purchases abroad. Visa will determine the exchange rate on a foreign transaction.
  • Direct deposits up to two days early. If Varo receives a payroll notification before your payday, it can deposit your money more quickly than many banks.

Downsides:

  • Cash deposits generally have fees. Since Varo doesn’t have branches, the only way to add cash directly to your account is by going to a retailer that participates in the Green Dot network, such as CVS, 7-Eleven or Walgreens. There’s a fee of up to $4.95 to add cash at their registers.
  • No physical checkbook. Like other mobile banks, Varo doesn’t provide checkbooks. Instead, you can use online bill pay to have Varo send a check on your behalf to a company you need to pay. Delivery tends to be three to nine business days. Online bill pay is another option and it’s faster, typically taking one to two business days.

KNOW WHEN TO SAVE (AND SPEND)

NerdWallet tracks your spending and makes it easy to see when you should cut back and when you can spend.

Savings: 5.0/5.0

Upsides:

  • The savings rate. Varo has a tiered rate that’s one of the highest out there: 2.80% annual percentage yield for up to $50,000, if requirements are fulfilled, and 1.92% APY for all other balances. Mobile banks Simple and Chime, for example, only offer 0.01% APY. Like its checking account, Varo’s savings account is federally insured up to $250,000.
  • No fees. There’s no monthly fee or minimum balance requirement.
  • Two automatic savings programs. The first one, Save Your Pay, lets you opt for any percentage of your paycheck to go directly to your savings account. The other, Save Your Change, rounds up every checking transaction to the nearest dollar and transfers those cents to savings.

Downsides:

  • Some hoops to earn the higher rate. You must receive at least $1,000 in direct deposits monthly and make at least five purchases with the Varo debit card per month in order to earn the 2.80% APY.

     

    Bank experience: 3.5/5.0

    Upsides:

    • Helpful budgeting tools. You can track spending and see Varo and non-Varo accounts on the app at once. In addition, the app has transaction alerts and lets you lock your debit card if lost or stolen.
    • Highly rated mobile apps. Customers rated Varo’s iOS app 4.7 out of 5 stars and Android app 4.6 out of 5 stars.
    • Extensive customer service. You can call Varo for support weekdays from 6 a.m. to 6 p.m. and weekends 8 a.m. to 4 p.m. Pacific time. Varo also responds via email and on Twitter.

    Downsides:

    • Not all Android app users can deposit checks. Mobile check deposit is available to those who request it, but it hasn’t rolled out across all users.
    • No branches. Because Varo has no branches to visit, depositing cash generally requires paying a fee at retailers. Depositing checks via Varo’s free mobile check deposit service is subject to limits, which aren’t something customers usually encounter when depositing checks at a branch. The maximum is generally $2,000 per check for customers, but larger checks may be accepted in some situations. Contact Varo for such requests.

    Overdraft fees 4.5/5.0

    The upside:

    • Varo can cover you up to $50 without a fee. If your account drops to as low as negative $50 because of a debit card purchase, online payment, check, or transfer, Varo may cover it. This doesn’t apply to ATM or over-the-counter bank withdrawals. To qualify for the program, called No Fee Overdraft, you must satisfy two requirements on a monthly basis: receive at least $1,000 in direct deposits and make five debit card purchases at a minimum.
    • No overdraft fees. Transactions not covered by Varo that would cause a negative balance are declined.

    The downside:

    • No overdraft protection or line of credit. Unlike many banks, Varo doesn’t provide either of these two overdraft programs, so customers who overdraw beyond negative $50 have transactions declined. Varo offers personal loans but they’re invite-only and aren’t currently connected with overdraft services.
    Varo

    at Varo,

    Member, FDIC

    » Ready to take the next step? Varo charges no fees and offers a high savings rate plus free budgeting tools. Compare similar mobile banks such as Chime (see our review) or Simple (see our review) or see more information below.

    More on mobile banks and free accounts


    Ratings methodology

    NerdWallet’s overall ratings for banks and credit unions are weighted averages of several categories: checking, savings, certificates of deposit or credit union share certificates, customer experience and overdraft fees.Factors we consider, depending on the category, include rates and fees, ATM and branch access, account features and limits, user-facing technology, customer service and innovation.

    The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

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