Varo Bank Review: Checking and Savings

Varo Bank offers a good combo of online banking with no hidden fees and high-yield online savings.
May 25, 2022

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Overall bank rating

Varo Bank

at Varo Bank, Member FDIC

  • Savings

  • Checking

  • Banking experience

  • Overdraft fees

4.5

NerdWallet rating 

The bottom line:

Varo Bank's banking and savings products have no monthly fees or minimum balance requirements. Varo also has a large 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.

Best for: APY maximizers who are comfortable with online-only banking, use direct deposit and rarely need to deposit cash.

Pros

  • No monthly fees.
  • Good annual percentage yield, or APY, on savings.
  • Early paycheck with direct deposit. (See below for more info from Varo.)
  • Up to $100 instant cash loan with Varo Advance feature.

Cons

  • Limits and fees for cash deposits.
  • Must meet requirements to qualify for the highest savings rate.
  • External transfers are limited to $10,000 per month.

Full review

Varo Savings Account

Savings

Member FDIC

5.0

/5
 NerdWallet rating 
APY
1.20%
With $5.12 min. balance for APY
Learn more

at Varo Bank

Varo has a tiered rate: 5.00% APY when certain conditions are met, and 1.20% APY when conditions aren’t met. To compare, the national average for savings accounts is just 0.10% APY.

The conditions: To earn the 5.00% APY, you must receive at least $1,000 in total qualifying direct deposits, your balances can't drop below zero at the end of the month and your Savings Account balance can't rise above $5,000 at the end of business on any day. See below for more information from Varo.

There's no monthly fee or minimum balance requirement for the Varo savings account but there is a minimum balance to earn interest. 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 allows an unlimited number of savings transfers and withdrawals, which you won’t find at all banks. But it does have limits on the amounts: Transfers to external accounts are limited to $5,000 per transfer and $10,000 per month. But wire transfers are not available, and Varo does not offer joint accounts.

Varo accounts are insured by the Federal Deposit Insurance Corp. The FDIC insures up to $250,000 per depositor, per ownership category, per institution. That means that your Varo savings account and banking account are insured, combined, up to $250,000.

» Have more cash you want to protect? Learn how to insure your money when you’re banking over $250K

See more information from Varo

Varo says: "Annual Percentage Yields (APY) are accurate as of June 1, 2022. All Varo Savings Accounts earn 1.20% APY beginning on that date. APY is variable and is subject to change. No minimum balance required to open an account. The minimum balance to earn interest varies based on the number of days in the calendar month. To earn 1.20% APY, the average of your close-of-business-day balances for the month must be at least $4.95 in a 31-day month and $5.12 for a 30-day month.

To earn 5.00% APY, the average of your close-of-business-day balances for the month must be at least $1.21 in a 31-day month and $1.25 in a 30-day month. To earn 5.00% APY, the Varo Savings Account must meet these requirements: Account Holder must (1) Get 1 or more direct deposit(s)* totaling $1,000 or more, (2) Have $0.00 or more in your Varo accounts at the end of the Qualifying Period;** and (3) Make sure your Savings Account balance isn’t higher than $5,000 at the end of each business day (6:00 pm MST/5:00 pm MDT). If these conditions are not met, you will earn 1.20% APY on the Savings Account balance for that period.

*Qualifying direct deposits are electronic deposits of your paycheck, pension or government benefits (such as Social Security or unemployment) from your employer or government agency. Tax refunds, government stimulus payments and Person-to-Person payments (such as Venmo) are not considered a direct deposit.

**The Qualifying Period begins on the first calendar day of the month and ends at close of business (4:25 pm MST/ 3:25 pm MDT) on the last business day of the month. Your eligibility is determined separately each month."

Varo Bank Account

Checking

Member FDIC

4.5

/5
 NerdWallet rating 
Monthly fee
$0
Learn more

at Varo Bank

There is no monthly fee or minimum balance required for Varo’s banking account, which comes with a Visa debit card. Varo Bank is part of the Allpoint network, which has over 55,000 fee-free ATMs all over the U.S., 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.

If Varo receives a direct deposit notification before your payday, it can deposit your money early, often up two days ahead of schedule. See below for more information from Varo.

Cash deposits at Varo are tougher. Because 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 $5.95 to add cash and limits on the amount of cash you can deposit, generally from $500 to $1,500, depending on the retailer.

» See how Varo stacks up: Check out our picks for the best online banks

See more information from Varo

Varo says: "We give you access to your direct deposits from employer and government payers on the day we receive them, which is typically up to 2 days earlier than your scheduled pay 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 4.9 out of 5 stars and Android app 4.7 out of 5 stars.

There may not be any branches, but you can call Varo for support on weekdays from 7 a.m. to 6 p.m. and on weekends from 7 a.m. to 3 p.m. Mountain time. Varo also responds via email and on Twitter.

» Want to compare? Read more about Varo and the other best banks and credit unions for mobile banking

Overdraft fees

4.0

NerdWallet rating 

Varo Bank declines transactions that would cause your account balance to go below zero. Having a transaction declined might not be ideal, but it does help you avoid piling up overdraft fees, which typically range from $30 to $35 per transaction at other banks. If for some reason a transaction that causes your balance to go negative does go through, you won’t be charged an overdraft fee.

Customers who need to overdraft their account can use the Varo Advance feature to borrow up to $100 instantly. You’ll pay a flat fee for a cash advance over $20, and you’ll need to repay the money in between 15 and 30 days. To access this feature, your account must: be active and at least 30 days old, and have had at least $1,000 in qualifying direct deposits made within the last 31 days. You can access the feature again once you’ve paid back the last advance.

A previous version of this article misstated the FDIC insurance coverage for deposit accounts for the single account ownership category. This article has been corrected.

Varo Savings Account

Savings

Member FDIC

5.0

/5
 NerdWallet rating 
APY
1.20%
With $5.12 min. balance for APY
Learn more

at Varo Bank

Varo has a tiered rate: 5.00% APY when certain conditions are met, and 1.20% APY when conditions aren’t met. To compare, the national average for savings accounts is just 0.10% APY.

The conditions: To earn the 5.00% APY, you must receive at least $1,000 in total qualifying direct deposits, your balances can't drop below zero at the end of the month and your Savings Account balance can't rise above $5,000 at the end of business on any day. See below for more information from Varo.

There's no monthly fee or minimum balance requirement for the Varo savings account but there is a minimum balance to earn interest. 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 allows an unlimited number of savings transfers and withdrawals, which you won’t find at all banks. But it does have limits on the amounts: Transfers to external accounts are limited to $5,000 per transfer and $10,000 per month. But wire transfers are not available, and Varo does not offer joint accounts.

Varo accounts are insured by the Federal Deposit Insurance Corp. The FDIC insures up to $250,000 per depositor, per ownership category, per institution. That means that your Varo savings account and banking account are insured, combined, up to $250,000.

» Have more cash you want to protect? Learn how to insure your money when you’re banking over $250K

See more information from Varo

Varo says: "Annual Percentage Yields (APY) are accurate as of June 1, 2022. All Varo Savings Accounts earn 1.20% APY beginning on that date. APY is variable and is subject to change. No minimum balance required to open an account. The minimum balance to earn interest varies based on the number of days in the calendar month. To earn 1.20% APY, the average of your close-of-business-day balances for the month must be at least $4.95 in a 31-day month and $5.12 for a 30-day month.

To earn 5.00% APY, the average of your close-of-business-day balances for the month must be at least $1.21 in a 31-day month and $1.25 in a 30-day month. To earn 5.00% APY, the Varo Savings Account must meet these requirements: Account Holder must (1) Get 1 or more direct deposit(s)* totaling $1,000 or more, (2) Have $0.00 or more in your Varo accounts at the end of the Qualifying Period;** and (3) Make sure your Savings Account balance isn’t higher than $5,000 at the end of each business day (6:00 pm MST/5:00 pm MDT). If these conditions are not met, you will earn 1.20% APY on the Savings Account balance for that period.

*Qualifying direct deposits are electronic deposits of your paycheck, pension or government benefits (such as Social Security or unemployment) from your employer or government agency. Tax refunds, government stimulus payments and Person-to-Person payments (such as Venmo) are not considered a direct deposit.

**The Qualifying Period begins on the first calendar day of the month and ends at close of business (4:25 pm MST/ 3:25 pm MDT) on the last business day of the month. Your eligibility is determined separately each month."

How does Varo Bank compare?

Current Product

NerdWallet rating 

5.0

/5
NerdWallet rating 

5.0

/5

APY

1.20%

With $5.12 min. balance for APY

APY

1.60%

With $0 min. balance for APY

Bonus

N/A

Bonus

$200

Requirements to qualify

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. How we rate banks, credit unions and other financial service providers.