If you’re looking for a bank that offers a high-yield savings account, no monthly fees, and cash-back perks, Varo Bank is worth considering. As a fully digital bank, Varo makes managing money easy with fee-free banking, early direct deposits, and access to 55,000 ATMs nationwide.
Founded in 2017, Varo became the first consumer fintech to receive a national bank charter in 2020. This means deposits are FDIC-insured directly through Varo Bank—not a third-party partner. Despite financial challenges in recent years, Varo continues to offer some of the highest savings rates available, making it a competitive option for online banking.
Is Varo Bank safe?
Varo Bank is a nationally chartered bank, meaning deposit accounts are protected by the FDIC for up to $250,000 per depositor, per account category. For joint accounts, this coverage extends to $500,000. This ensures that even if the bank faces financial trouble, customer funds remain secure.
Varo has seen fluctuations in its valuation over the past few years. In 2021, the bank was valued at $2.5 billion after a major funding round. By 2023, its valuation had dropped to $1.8 billion, and it raised an additional $50 million in equity that year. Despite these financial shifts, Varo continues to operate, offering high-yield savings accounts and other banking services.
While its financial position has changed, Varo’s FDIC insurance and national bank charter provide strong protection for account holders.
Varo Checking Account
Varo Bank offers a single checking account with no monthly maintenance fees, no overdraft fees, no minimum balance requirements, and no minimum opening deposits. Customers can receive direct deposits up to two days early, transfer funds with Zelle, and deposit checks through the mobile app.
ATM Access and Foreign Transactions
Varo customers can access over 55,000 Allpoint® ATMs nationwide without fees. However, withdrawals from out-of-network ATMs come with a $3 fee, plus any charges from the ATM operator.
For international use, Varo does not charge foreign transaction fees, allowing customers to make purchases abroad without extra costs.
Cash Deposits and Associated Fees
Since Varo is an online-only bank, it does not have physical branches for cash deposits. Customers can deposit cash at participating third-party retailers through the Green Dot Network, including Walmart, CVS, Walgreens, and Dollar General. These locations may charge up to $4.95 per deposit, depending on the retailer.
Varo Savings Account
Varo Bank offers a high-yield savings account designed to help customers grow their money efficiently.
All Varo Savings Accounts start with a 2.50% annual percentage yield (APY). Customers can qualify for a 5.00% APY on balances up to $5,000 by meeting two requirements each month:
- Receive direct deposits totaling $1,000 or more.
- Maintain a positive balance in both the Varo Bank Account and Varo Savings Account at the end of the month.
Any balance over $5,000 continues to earn the standard 2.50% APY. This tiered system allows account holders to maximize interest earnings while keeping their money easily accessible.
Automatic Savings Tools
Varo makes saving effortless with two built-in automation features:
- Save Your Pay – A percentage of every direct deposit can be automatically transferred into savings, helping customers consistently set aside money without extra effort.
- Save Your Change – Every debit card purchase rounds up to the nearest dollar, with the difference transferred into the savings account. Over time, these small amounts can add up significantly.
Additional Banking Features
Varo Bank offers several features beyond traditional checking and savings accounts to help customers manage their finances effectively.
Varo Advance
Varo Advance provides eligible customers with cash advances up to $500 to cover unexpected expenses. To qualify, you need an active Varo Bank Account with at least $800 in qualifying direct deposits during the current or previous calendar month.
Advances are deposited directly into your bank account, and while there are no interest charges, a small fee applies based on the advance amount. Repayment is automatically deducted from your account on the due date, ensuring a seamless experience.
Varo Believe Credit Card
The Varo Believe Credit Card is a secured credit card designed to help you build or improve your credit score. Unlike traditional secured cards, it requires no minimum security deposit and charges no annual fees or interest.
To qualify, you must have a Varo Bank Account with at least $200 in qualifying direct deposits over the past 31 days. The card works by using funds in your linked Varo Believe Secured Account to set your spending limit, promoting responsible usage. Payments are reported to major credit bureaus, aiding in credit history building.
Automatic Cashback
Varo offers an Automatic Cashback program, allowing you to earn up to 6% cash back on purchases at select retailers. There’s no need to sign up; simply use your Varo Visa® Debit Card at participating merchants, and cashback rewards are automatically deposited into your Varo Bank Account once your cashback balance reaches $5.
Early Direct Deposit
With Varo’s Early Direct Deposit feature, you can access your paycheck up to two days earlier than your scheduled payday. This service depends on the timing of your employer’s payment instructions and can provide quicker access to your funds, helping you manage expenses more effectively.
No Hidden Fees
Varo is committed to transparent banking with no hidden fees. This means no monthly maintenance fees, no overdraft fees, no minimum balance requirements, and free access to over 55,000 ATMs nationwide. This approach ensures you keep more of your money without worrying about unexpected charges.
Varo Bank Pros & Cons
Like any bank, Varo has strengths and weaknesses. While it offers no account fees and high-interest savings, some concerns remain about its financial stability.
Pros
- High-Yield Savings: Earn up to 5.00% APY on savings, significantly higher than most traditional banks.
- No Account Fees: No maintenance fees, overdraft fees, or minimum balance requirements.
- Early Direct Deposit: Get paychecks up to two days early, depending on employer processing times.
- Cash-Back: Earn up to 6% cash back on purchases at select retailers with automatic deposit into your bank account.
- Access to 55,000 ATMs: Withdraw cash at Allpoint® ATMs nationwide with no withdrawal charges.
- Credit-Building Options: The Varo Believe Credit Card offers a way to improve credit without an upfront security deposit.
- Small Cash Advances: Varo Advance allows eligible customers to borrow up to $500 with no interest.
Cons
- Financial Stability Concerns: Varo has seen declining valuations and continues to seek additional funding. While FDIC insurance protects deposits, customers may be wary of the bank’s long-term sustainability.
- Savings Rate Requirements: The 5.00% APY is only available for balances up to $5,000 and requires $1,000 in total qualifying direct deposits per month. Balances over $5,000 earn a lower rate.
- No Physical Branches: As a digital-only bank, Varo does not offer in-person customer service.
- Limited Account Options: No money market accounts, CDs, personal loans, or investment products.
- Out-of-Network ATM Fees: Withdrawals from non-Allpoint® ATMs come with a $3 fee, plus potential fees from the ATM provider.
- Cash Deposit Fees: Deposits through the Green Dot Network cost up to $4.95 per transaction.
Varo Fees
Varo keeps banking costs low by eliminating many common fees, such as monthly maintenance fees and overdraft charges. However, some services still come with costs.
ATM Fees
- Fee-free withdrawals: Available at over 55,000 Allpoint® ATMs nationwide.
- Out-of-network withdrawals: $3 per transaction, plus any additional fees charged by the ATM provider.
Cash Deposit Fees
- Deposits through the Green Dot Network: Up to $4.95 per transaction, depending on the retailer. Cash can be deposited at stores like Walmart, CVS, and Walgreens.
Overdraft Protection
- No overdraft fees: If a transaction exceeds your available balance, Varo declines the transaction instead of charging an overdraft fee.
- Cash advances: Eligible customers can borrow up to $500 in cash advances, with fees ranging from $0 to $15 depending on the loan amount.
Foreign Transaction Fees
- None: Varo does not charge foreign transaction fees, allowing customers to use their debit cards abroad without extra costs.
Varo’s approach to fees is simple—no unnecessary charges, just straightforward banking with minimal costs for optional services.
How Varo Compares to Other Online Banks
Varo competes with other online banks by offering high-yield savings, no monthly fees, and unique features like cash advances and credit-building tools. Below is a side-by-side comparison of Varo, Chime, and SoFi.
| Feature | Varo | Chime | SoFi |
|---|---|---|---|
| Savings APY | Up to 5.00% on first $5,000, 2.50% after | 2.00% APY on all balances | 4.60% APY on savings, 0.50% APY on checking |
| Cash Advances | Up to $500 (fees may apply) | No direct cash advances, but SpotMe covers overdrafts up to $200 | No cash advances |
| Overdraft Protection | Transactions declined if insufficient funds | SpotMe covers overdrafts up to $200 | Covers overdrafts up to $50 for direct deposit customers |
| Credit Card | Varo Believe (secured, no security deposit) | Chime Credit Builder (secured, no deposit required) | No secured credit card |
| Monthly Fees | No monthly fees | No monthly fees | No monthly fees |
| ATM Access | 55,000+ fee-free ATMs | 60,000+ fee-free ATMs | 55,000+ fee-free ATMs |
| Foreign Transaction Fees | None | None | None |
| Investment & Loans | No investment or lending options | No investment or lending options | Personal loans, student loans, mortgage loans, investment accounts |
Which One Is Better?
- Choose SoFi if you want a full-service financial platform with investing and lending options.
- Choose Varo if you want the highest savings APY and access to cash advances.
- Choose Chime if you want banking with no monthly fees and overdraft protection up to $200.
Varo Bank Reviews
Varo Bank receives a mix of positive and negative feedback. Many customers appreciate the easy-to-use platform, lack of account fees, and high-yield savings, while some have reported issues with account freezes and customer service.
Trustpilot and App Store Ratings
- Trustpilot: Varo has a 3.8 out of 5-star rating based on thousands of reviews.
- Apple App Store: The Varo app holds a 4.9 out of 5-star rating from over 230,000 reviews, reflecting strong user satisfaction.
Common Praises
- User-Friendly App: Customers frequently highlight the smooth, intuitive experience of the Varo mobile app, making banking easy and accessible.
- Fee-Free Banking: Many users appreciate that Varo does not charge monthly maintenance or overdraft fees, making it a cost-effective choice.
Common Complaints
- Account Freezes: Some customers report unexpected account holds, making it difficult to access funds. Complaints suggest that these freezes sometimes occur without clear explanations from the bank.
- Customer Service Challenges: Several users mention difficulties reaching customer support, with concerns about slow response times and limited communication channels.
The good reviews outnumber the bad on Trustpilot and other personal finance sites, with many customers finding Varo’s digital banking services to be a strong alternative to traditional banks.
Frequently Asked Questions
Can I open a Varo account if I have bad credit?
Yes, you can open a Varo account even if you have bad credit. Varo does not perform a credit check when you apply for a checking or savings account. This makes it accessible for individuals who are working on rebuilding their credit.
Does Varo have branches?
As an online-only bank, Varo does not have branches for in-person customer service. However, Varo customers gain access to 55,000 ATMs. You can withdraw money, check balances, and deposit cash.
Can I use Varo for direct deposits from government benefits?
Yes, Varo accepts direct deposits from government agencies, including Social Security, unemployment benefits, and tax refunds. You can provide your Varo account and routing number to set up direct deposit with the agency.
Does Varo offer mobile check deposits?
Yes, Varo allows customers to deposit checks using the mobile app. Simply take a photo of the front and back of the check and follow the app’s instructions. Funds are typically available within one to two business days, depending on the deposit amount and account history.
Can I open multiple Varo accounts?
No, Varo does not currently allow customers to open multiple personal checking or savings accounts under the same name. However, you can open a joint account, which offers FDIC insurance coverage of up to $500,000.
Does Varo support international wire transfers?
No, Varo does not support international wire transfers. However, you can use your Varo debit card for purchases abroad with no foreign transaction fees.
