Varo Review: Checking and Savings

Varo is a mobile-only banking app with a hard-to-beat combo: online checking with no hidden fees and high-yield savings.

Spencer TierneyJune 26, 2020

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Overall bank rating

Varo

at Varo,

Deposits are FDIC Insured

  • Savings

    Savings

  • Checking

    Checking

  • Banking experience

    Banking experience

  • Overdraft fees

    Overdraft fees

4.5

NerdWallet rating 

The bottom line: Varo’s checking and savings products have no monthly fees or minimum balance requirements. Varo also has a fee-free ATM network and automatic savings tools. But there are no branches, and cash deposits are only available through third-party retailers that charge fees.

Pros

  • No monthly fees.

  • No-fee overdrafts up to $50 for eligible customers.

  • Good annual percentage yield, or APY, on savings.

  • Early paycheck with direct deposit.

Cons

  • Limits on cash deposits.

Full review

Varo Varo Savings Account

at Varo,

Deposits are FDIC Insured

4.5

NerdWallet rating 

at Varo,

Deposits are FDIC Insured

APY

0.81%

With $0 minimum balance

Varo has a tiered rate: 2.80% APY for balances up to $10,000 when certain conditions are met, and 0.81% APY when conditions aren’t met, or for balances above $10,000. To compare, the national average for savings accounts is just 0.05% APY.

The conditions:  To earn the 2.80% APY on up to $10,000, you must receive at least $1,000 in total direct deposits monthly and make at least five purchases with the Varo debit card per month.

There's no monthly fee or minimum balance requirement for the Varo savings account. It also offers two automatic savings programs that are linked to Varo’s bank account. The first one, Save Your Pay, lets you opt for a percentage of your direct deposit to go directly to your savings account. The other, Save Your Change, rounds up banking transactions to the nearest dollar and transfers those cents to savings.

Varo accounts are federally insured up to $250,000 combined.

Varo says: “Varo Annual Percentage Yield (APY) is accurate as of September 15, 2020. This rate is variable and may change. No minimum balance required to open account. Balance in Savings Account must be at least $0.01 to earn interest."

Varo Varo Bank Account

at Varo,

Deposits are FDIC Insured

4.5

NerdWallet rating 

at Varo,

Deposits are FDIC Insured

Monthly Fee

$0

There is no monthly fee or minimum balance required for Varo’s checking product, which comes with a Visa debit card. Varo is part of the Allpoint network, which has over 55,000 fee-free ATMs in all 50 states, Puerto Rico, Canada, Mexico, Australia and the United Kingdom.

Unlike many banks, Varo doesn’t charge a foreign transaction fee on ATM withdrawals or debit card purchases abroad. Note that Visa will determine the exchange rate on foreign transactions.

If you use a non-Allpoint ATM, Varo will charge you $2.50, in addition to any fees charged by the ATM owner.

For deposits, if Varo receives a direct deposit notification before your payday, it can deposit your money early, often up two days ahead of schedule.

Cash deposits are tougher. 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 and limits on the amount of cash you can deposit, generally from $500 to $1,500, depending on the retailer.

Varo says: “Early access to direct deposit funds depends on timing of payer’s submission of deposits. We generally post such deposits on the day they are received which may be up to 2 days earlier than the payer’s scheduled payment date."

Banking experience

4.0

NerdWallet rating 

The Varo mobile app lets you track spending with Varo and non-Varo accounts combined. In addition, the app offers transaction alerts and lets you lock your debit card if it’s lost or stolen.

Customers rated Varo’s iOS app 4.8 out of 5 stars and Android app 4.6 out of 5 stars.

There may not be any branches, but you can call Varo for support weekdays from 8 a.m. to 9 p.m. and weekends 11 a.m. to 7 p.m. Eastern time. Varo also responds via email and on Twitter.

Overdraft fees

4.5

NerdWallet rating 

Varo helps customers avoid high overdraft costs with its No Fee Overdraft program. If your account drops to as low as negative $50 because of debit card purchases and cash withdrawals, Varo may approve the transactions without charging a penalty. To qualify, you must opt in to the program and then satisfy two requirements on a monthly basis:  Receive at least $1,000 in direct deposits and make at least five debit card purchases. You will also need to repay any negative balance within 30 days to remain eligible.

Transactions that would send your account negative by more than $50, or put you in the red when you aren’t eligible for No Fee Overdraft, would be declined with no fee. Varo does not offer an overdraft savings transfer or line of credit option.

Varo Varo Savings Account

at Varo,

Deposits are FDIC Insured

4.5

NerdWallet rating 

at Varo,

Deposits are FDIC Insured

APY

0.81%

With $0 minimum balance

Varo has a tiered rate: 2.80% APY for balances up to $10,000 when certain conditions are met, and 0.81% APY when conditions aren’t met, or for balances above $10,000. To compare, the national average for savings accounts is just 0.05% APY.

The conditions:  To earn the 2.80% APY on up to $10,000, you must receive at least $1,000 in total direct deposits monthly and make at least five purchases with the Varo debit card per month.

There's no monthly fee or minimum balance requirement for the Varo savings account. It also offers two automatic savings programs that are linked to Varo’s bank account. The first one, Save Your Pay, lets you opt for a percentage of your direct deposit to go directly to your savings account. The other, Save Your Change, rounds up banking transactions to the nearest dollar and transfers those cents to savings.

Varo accounts are federally insured up to $250,000 combined.

Varo says: “Varo Annual Percentage Yield (APY) is accurate as of September 15, 2020. This rate is variable and may change. No minimum balance required to open account. Balance in Savings Account must be at least $0.01 to earn interest."

How does Varo compare?

APY

0.81%

With $0 minimum balance

APY

0.60%

With $0 minimum balance

APY

0.01%

With $0 minimum balance

Bonus

N/A

Bonus

N/A

Bonus

$150

Requirements to qualify

RATING 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, banking 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.