Varo Bank Review: Checking and Savings

Varo has a tiered rate: 5.00% APY on the first $5,000 when certain conditions are met, and 2.50% APY for anything over $5,000 or on the entire balance when conditions aren’t met. To compare, the national average for savings accounts is just 0.41% APY.

The conditions: To earn the 5.00% APY for balances up to $5,000, you must receive at least $1,000 in total qualifying direct deposits and your checking and savings balance must be positive at the end of the month. You’ll need to meet those requirements in the current month to qualify to earn 5.00% APY for the following month. 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.

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; you’ll be able to see how much you can transfer when you’re logged into the bank’s app. 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

There is no monthly fee or minimum balance required for Varo’s banking account, which comes with a Visa debit card. Varo Bank offers fee-free access to more than 40,000 ATMs in the Allpoint network.

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.

Varo will charge you $3.50 if you use a non-Allpoint ATM. That’s in addition to any fees charged by the ATM owner.

Varo can deposit your money early, if it receives a direct deposit notification before your payday. You can get paid up two days ahead of schedule.

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 typically a fee of up to $4.95 to add cash at their registers and limits on the amount of cash you can deposit, generally up to $500 per transaction, and $1,500 per day, depending on the retailer. CVS is an exception, though: Cash deposits are free at most of the retailer’s locations.

The Varo mobile app offers transaction alerts and lets you lock your debit card if it’s lost or stolen. The bank's iOS app and Android apps are both highly rated.

There are no branches, but you can call Varo for support seven days a week from 7 a.m. to 8:30 p.m. ET. Varo also offers live chat support 24/7.

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 $15 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.

The Varo Advance feature allows customers to borrow up to $500 instantly, as long as certain requirements are met. You’ll pay a fee; that cost depends on the amount you’re approved to borrow, and you’ll need to repay the money within 15 and 30 days.