Where have all of the high APYs gone? Since the drop in Treasury bond prices, deposit yields have declined as well.
But there are still places to find a high APY and Varo Bank is one of them. It pays up to a whopping 0.81% APY on its savings account if you meet certain requirements.
Varo Bank is a modern fintech. This means it doesn’t have branches and you can’t easily deposit cash into your accounts. But if you are good with all of that, you could earn a strong yield on your deposits. In this article, we’ll go through what Varo Bank has to offer, along with some of its limitations.
Varo Bank Details
Savings and checking
- Online-only bank with competitive rates and no fees
- Free ATM access at over 55,0000 Allpoint® ATMs
- Get your paycheck up to two days early with direct deposit
Who Is Varo Bank?
Varo Bank is an online bank that offers several deposit products. It was founded in 2015 and is based in San Francisco. Colin Walsh is the CEO and Co-Founder.
“As the first Fintech with a national bank charter, and within the regulated system, Varo will be able to offer a range of tech-driven products, solutions, and experiences that no Fintech and no traditional bank can," said Walsh in an interview with CrowdfundInsider.
Walsh also promised that the Varo Bank platform would "power true financial innovation across a range of payments, deposit, and credit products, along with advanced personalization, predictive insights, and virtual communities.”
What Do They Offer?
- Overdraft fee (must first meet requirements) on up to $50
- ATMs fees at 55,000+ Allpoint® ATMs
- Foreign transaction fees
- Monthly service fees
- Debit card replacement fee
- Transfer fees
To qualify for no-fee overdrafts, you must first meet the following requirements:
- Make at least five qualifying Varo Visa® Debit Card purchases in each calendar month.
- Receive total payroll or government direct deposits of $1,000 or more in the same calendar month.
After meeting the qualifications, you can turn on the No Fee Overdraft feature in the Varo app. If you don't meet the requirements above, you simply won't be allowed to overdraft your account at all. So either way, you'll never be charged overdraft fees with Varo.
If No Fee overdrafts is turned on in your account, up to $50 of overdraft charges are available on the Varo Visa® Debit Card. You'll have 30 days to pay back the overdraft, which is handled automatically by Varo. On your next deposit, you’ll see the overdraft amount deducted.
Varo has a two-tiered savings account. The first tier earns 0.81% APY and doesn't have a balance requirement. The second tier pays 2.80% APY, but three requirements must be met each calendar month to receive that APY:
- Make at least five qualifying Varo Visa® Debit Card purchases
- Receive total payroll or government direct deposits of $1,000 or more
- Keep a daily Savings Account balance under $10,000.
That last requirement might sound odd. But you can’t go over a $10,000 balance or you’ll lose the higher APY.
Varo can also help you save money automatically. You can move a percentage of your checking account direct deposit into your savings account. This is called Safe Your Pay. You can also participate in Save Your Change, which will round up a purchase to the nearest dollar and save the difference to your savings account.
With Varo’s checking account product, you can direct deposit your paycheck and have it available up to two days earlier than the average direct deposit.
There is a $2,500 per calendar day spending limit with your Varo debit card. There is also a $750 per calendar day maximum withdrawal amount. If you lose your debit card, it can be locked right from the Varo mobile app.
No Fee-Free Cash Deposits
If you deal with cash, Varo Bank may not be what you're looking for. There isn’t a way to directly deposit cash with Varo. Instead, you have to go to a Green Dot Network® location such as Walmart, CVS, Rite Aid, Walgreens, 7-11, Dollar General, Family Dollar, Albertsons, Safeway, Kmart, or Kroger.
These businesses may charge a fee to deposit your cash. You can also purchase a Green Dot MoneyPak, but there may be a fee charged by merchants for that as well. These fees range from $4.95 to $5.95. Additionally, there is a limit on cash deposits of $1,000 per day with a maximum of $5,000 per month.
Withdrawing cash is much more convenient, however. You can get cash fee-free at over 55,000 AllPoint® ATMs. You also can ask for cash back at the register when using your Varo Bank debit card.
55,000+ Free ATMs
38,000+ Free ATMs
91,000 Free ATMs
Are There Any Fees?
No, you won't be charged any fees to do your banking with Varo Bank. However, as explained above, you may be charged a fee by a retailer should you choose to use a Green Dot Reload register to deposit cash to your Varo Bank account.
How Do I Open An Account?
You can visit the Varo Bank website to open an account online. Click the black "Get Started" button and then simply follow the prompts. Varo says that the application process shouldn't take longer than five minutes.
Is My Money Safe?
Yes, Varo Bank is an FDIC member bank. With FDIC insurance, you get up to $250,000 of federal deposit protection per account. Also, all of your information is protected with 256-bit AES encryption technology.
Is It Worth It?
If you don’t deal with cash often or need branches, then Varo Bank could definitely be worth it for the high APY. In fact, it has one of the highest yields currently available.
And with no monthly fees (regardless of your account balance), foreign transaction fees, and potential No Fee Overdrafts, there really is a lot to love about Varo Bank.
But Varo won't be a good fit if you deposit cash often or need branch access. If that's you, you'll probably want to look for high-yield savings or free checking options at full-service banks or credit unions.
Varo Bank Features
Savings and checking
Foreign Transaction Fees
None (overdraft transactions will be declined if certain requirements aren't met)
Debit Card Replacement Fee
None (online-only bank)
55,000+ fee-free AllPoint® ATM network
Customer Service Number
Customer Service Hours
Mon-Fri, 8 AM to 9 PM (EST)
Weekends, 11 AM- 7 PM (EST)
Mobile App Availability
iOS and Android
Varo Bank Review
- Interest Rates
- Fees and Charges
- Customer Service
- Ease of Use
- Tools and Resources
- Products and Services
Varo Bank is an online-only bank that charges no fees, pays a high APY on deposits, and offers automatic savings tools.
- High APY on deposits
- Zero fees
- Free overdraft protection for eligible accounts
- Early access to direct deposit paychecks
- No brick-and-mortar branches
- No fee-free cash deposits
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.