Varo Bank Review: Checking and Savings

Varo Bank has a hard-to-beat combo: online banking with no hidden fees and high-yield online savings.
Spencer TierneyDec 11, 2020

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Overall bank rating

Varo

at Varo, 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 fee-free ATM network (see below for more information from Varo) 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 highest savings rate.
  • External transfers are limited to $10,000 per month.

Full review

Varo Savings Account

at Varo, Member FDIC

5.0

NerdWallet rating 

at Varo, Member FDIC

APY

0.20%

With $0.01 minimum balance

Varo has a tiered rate: 3.00% APY for balances up to $5,000 when certain conditions are met, and 0.20% APY when conditions aren’t met, or for balances above $5,000. To compare, the national average for savings accounts is just 0.06% APY.

The conditions: To earn the 3.00% APY on up to $5,000, you must receive at least $1,000 in total qualifying direct deposits. Your balance can't drop below zero at any point during the month, and it can't rise above $5,000. See below for more information from Varo.

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.

Unlimited savings transfers and withdrawals are allowed, but external transfer limits are limited to $5,000 per transfer and $10,000 per month. Wire transfers are not available, and Varo does not offer joint accounts.

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

Varo says: "Annual Percentage Yield (APY) is accurate as of July 1, 2021. All Varo Savings Accounts earn 0.20% APY beginning on that date. APY is variable and is subject to change. No minimum balance required to open an account. Balance in Savings must be at least $0.01 to earn interest. To earn 3.00% APY, the Varo Savings Account must meet these requirements: Account Holder must

  1. Receive total qualifying direct deposits of $1,000 or more to a Varo Bank Account or Varo Savings Account in the same qualifying period.

  2. Maintain a daily balance in the Varo Savings Account that does not exceed $5,000.

  3. Keep your Bank Account and Savings Account balances above or equal to $0.00 the entire calendar month. If these conditions are not met, you will earn 0.20% APY on the Savings Account balance for that period. The Qualifying Period is defined as the first day of the calendar month through the last business day of the calendar month.

Varo Bank Account

at Varo, Member FDIC

4.5

NerdWallet rating 

at Varo, Member FDIC

Monthly Fee

$0

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 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 $5.95 to add cash at their registers and limits on the amount of cash you can deposit, generally from $500 to $1,000, depending on the retailer.

Customers can use the Varo Advance feature to get 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 option, 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.

Varo says: "Bank Account Services provided by Varo Bank, N.A. Member FDIC. Visa ® Debit Card is issued by Varo Bank, N.A. pursuant to a license from Visa U.S.A. Inc and may be used everywhere Visa debit cards are accepted."

"Early access to direct deposit funds depends on timing of the 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."

"There is no fee to withdraw money from any Allpoint® ATM. There is a $2.50 ATM cash withdrawal fee assessed by Varo Bank for all non-Allpoint® ATM transactions (out of network transactions). The ATM operator may charge an additional fee."

Banking experience

4.0

NerdWallet rating 

What to know about neobanks: Neobanks can be solid options for consumers who prefer online-only banking. Funds deposited in these accounts are usually FDIC-insured through partner banks, which will also typically receive customers’ money if a neobank closes, so customer funds are safe. Neobank accounts often have low monthly fees and earn strong rates. However, they may also lack traditional banking features, including in-person customer service and access to personal or cashier’s checks (often required for large purchases, such as buying a home) or wire transfers. Consider these details before opening an account.

Varo customer experience: 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 4.5 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

4.0

NerdWallet rating 

Varo Bank does not allow overdrafts, so a transaction that would cause your account balance to go below zero would likely be declined. Having a transaction declined might not be ideal, but it can help you avoid high overdraft fees.

Some banks approve overdraft transactions, which can be convenient, but those institutions typically charge fees of around $35 per transaction. The charges from those banks could send an account even further into negative territory.

Varo Savings Account

at Varo, Member FDIC

5.0

NerdWallet rating 

at Varo, Member FDIC

APY

0.20%

With $0.01 minimum balance

Varo has a tiered rate: 3.00% APY for balances up to $5,000 when certain conditions are met, and 0.20% APY when conditions aren’t met, or for balances above $5,000. To compare, the national average for savings accounts is just 0.06% APY.

The conditions: To earn the 3.00% APY on up to $5,000, you must receive at least $1,000 in total qualifying direct deposits. Your balance can't drop below zero at any point during the month, and it can't rise above $5,000. See below for more information from Varo.

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.

Unlimited savings transfers and withdrawals are allowed, but external transfer limits are limited to $5,000 per transfer and $10,000 per month. Wire transfers are not available, and Varo does not offer joint accounts.

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

Varo says: "Annual Percentage Yield (APY) is accurate as of July 1, 2021. All Varo Savings Accounts earn 0.20% APY beginning on that date. APY is variable and is subject to change. No minimum balance required to open an account. Balance in Savings must be at least $0.01 to earn interest. To earn 3.00% APY, the Varo Savings Account must meet these requirements: Account Holder must

  1. Receive total qualifying direct deposits of $1,000 or more to a Varo Bank Account or Varo Savings Account in the same qualifying period.

  2. Maintain a daily balance in the Varo Savings Account that does not exceed $5,000.

  3. Keep your Bank Account and Savings Account balances above or equal to $0.00 the entire calendar month. If these conditions are not met, you will earn 0.20% APY on the Savings Account balance for that period. The Qualifying Period is defined as the first day of the calendar month through the last business day of the calendar month.

How does Varo compare?

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
APY

0.20%

With $0.01 minimum balance

APY

0.50%

With $0 minimum balance

APY

0.40%

With $0 minimum balance

Bonus

N/A

Bonus

N/A

Bonus

N/A

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.