Varo Bank review 2023

Launched in 2015, Varo Bank is an FDIC-insured, online-only bank offering savings and checking accounts. 

Online Varo Bank reviews usually highlight its high-yield savings account interest rates, and for good reason: You can earn 5.00% APY on balances up to $5,000, which is in line with what the best savings accounts offer. However, as our Varo Bank review points out, you’ll need to meet two requirements to qualify for the rate: 

1. Make at least $1,000 in direct deposits each month, and
2. End each month with positive balances in your checking and savings accounts.
3. You’ll earn 3.00% APY if you don’t meet the criteria — and on balances over $5,000 — which is still well above the national average savings rate of just 0.45%. 

Of course, the best online banks have more than just competitive rates: They also offer low fees and easy access to your money. Varo delivers on both, with zero monthly fees, no overdraft fees, an extensive network of fee-free ATMs, and multiple options for depositing and withdrawing cash. 

• $0 minimum opening deposit
• No monthly or overdraft fees
• 55,000+ fee-free ATMs nationwide
• Early direct deposit
• Send and receive money with Zelle
• Highly rated mobile app

• Must meet specific requirements to earn the best APY
• 5.00% APY applies to balances below $5,000 
• Need a checking account to open a savings account
• No domestic or international wire transfers 

• No monthly fees and a $0 minimum deposit to open.
• Comes with a Visa debit card and an extensive network of free ATMs.

The Varo Bank Account is an online checking account with zero monthly fees and no minimum balance requirements. It comes with a Visa debit card, which you can use to make purchases at home and abroad with no foreign transaction fees, a big plus if you’re a frequent traveler. And you can get up to 6% cash back (up to $50 per month) when you use your debit card for everyday purchases with select brands.

You’ll have access to 55,000+ fee-free Allpoint ATMs, where you can withdraw up to $1,000 daily (Varo charges $3 per transaction when you use an out-of-network ATM). You can also use the card to get up to $500 in cash per day when you check out at a store — or up to $1,000 per day when you make an “over the counter” cash withdrawal at major banks and credit union branches (a $2.50 fee applies). 

Cash deposits are tricky because Varo doesn’t have any physical branches. Still, you can add cash to your account by going to a Green Dot retailer like Walmart or CVS (the store will charge a fee of up to $5.95). You can also deposit paper checks using Varo’s mobile app. The limits are dynamic and based on how long your account has been open and your prior account activity. 

Like many online banks, Varo offers early direct deposit so you can get your paycheck up to two days early. 

• Competitive APY on balances up to $5,000 for those who qualify.
• No monthly fees or minimum balance requirements. 

Varo’s high-yield savings account has a tiered interest rate. You’ll start out earning 3.00% APY. If you have at least $1,000 in qualifying direct deposits and positive balances in your checking and savings accounts at the end of the month, you’ll earn 5.00% APY the following month on the first $5,000 in your account — and 3.00% APY on higher balances. If you don’t meet the requirements during any given month, you’ll earn 3.00% APY on your entire balance the next month. 

There are no monthly fees or minimum balance requirements, and Varo allows unlimited transfers and withdrawals (though dollar limits apply). There are two automatic savings programs to help you grow your balance. Save Your Pay automatically funnels a percentage of your direct deposits into your savings account. Save Your Change rounds up your transactions to the nearest dollar and sweeps the cash into your savings account. 

• Borrow up to $250 for a flat-rate fee, and get 30 days to repay.
• Borrowing doesn’t impact your credit score.

If you’re running low on cash, Varo Advance lets you borrow up to $250 right away. If you qualify, $20 “spots” are free, and you pay a flat-rate fee (i.e., no interest) when you borrow more:

You get 30 days to repay the cash, and you’ll need to repay one advance before requesting another. And it’s worth noting that borrowing doesn’t impact your credit score. 

Once you qualify for an advance, you can tap a button in the app to borrow the amount you’re eligible for. You’ll start at a low amount and work up to the $250 maximum based on your account balances, activity, direct deposit history, and number of on-time Varo Advance repayments. 

Varo says the fastest and easiest way to reach live customer service is through the Varo app, where chat support is available seven days a week from 8 a.m. to 4:30 p.m. MT (chat support is closed on Thanksgiving, Christmas, and New Year’s Day). Phone support is available on weekdays from 8 a.m. to 4:30 p.m., but only if you need help filing a dispute, logging in to your account, or activating your digital wallet. All other inquiries will be directed to chat support. 

If you misplace your card, you can lock it from the Varo app to prevent unauthorized purchases and withdrawals. Once locked, the card can’t be used for in-store or online purchases, ATM withdrawals, or instant transfers from digital wallets like Cash App, Lyft, PayPal, or Uber. Varo recommends contacting customer service immediately if your card is lost or stolen.

Varo doesn’t charge a monthly maintenance or overdraft fee (some banks charge up to $35 per overdraft). There are also zero foreign transaction fees or costs for using in-network ATMs. Still, Varo has a few fees, including:

• $3 for out-of-network ATM withdrawals
• Up to $5.95 third-party fee for cash deposits 
• $2.50 over the counter cash withdrawal fee (available at most major banks and credit union branches)
• $0 – $15 cash advance fee, depending on the amount of the advance (Varo waives the fee for qualified military personnel and their families) 

Varo has no physical branches, but you have many options for accessing your money. The quickest way to withdraw money is by ATM, and you can also get cash back when you make debit card purchases or connect apps like Apple Pay, Google Pay, PayPal, Cash App, and Venmo to cover everyday purchases.

To deposit money, you can set up direct deposits, transfer funds between Varo accounts or an external bank account, set up transfers from digital wallets, and use the app for mobile check deposits. 

Additionally, you can deposit cash when you check out at 90,000+ Green Dot locations nationwide (including Walmart, CVS, Rite Aid, Walgreens, 7-Eleven, Dollar General, Family Dollar, Albertsons, Safeway, Kmart, and Kroger). Varo doesn’t charge a fee, but the store will charge up to $4.95. You can also deposit cash with a Green Dot MoneyPak at most of these same stores for $5.95. 

Varo is ideal for people who have straightforward finances and are content having just a checking and savings account under one roof (unlike some banks, Varo doesn’t offer money market accounts, CDs, credit cards, or loans). Varo makes sense if you have regular direct deposits and tend to keep less than $5,000 in your savings account; that way, you’ll qualify for the 5.00% APY on your entire balance. And, because Varo is a digital bank, you should be comfortable doing your banking online and through a mobile app. 

Varo’s high-yield savings account earns 5.00% APY, but only on balances up to $5,000 (you’ll earn just 3.00% above that). You should look elsewhere if you have more savings and want to earn a competitive rate on the entire amount. Also, you need at least $1,000 in qualifying direct deposits each month to earn the 5.00% APY. So, consider other options if you don’t receive regular deposits from your employer or a government agency (e.g., Social Security or unemployment). And since you’ll pay $5.95 to deposit cash, Varo may not be the best choice if you make frequent cash deposits. 

Varo offers competitive rates on its high-yield savings account and low fees across the board. It also has a user-friendly mobile app, a broad network of free ATMs, and flexible customer service hours. The biggest drawbacks are the direct deposit and balance requirements to earn the best APY — and that you can get the rate only on the first $5,000. Still, if those limitations work for your situation, Varo is a solid choice. If not, you can find better options elsewhere. 

Varo is an FDIC-member bank, so deposits are federally insured up to $250,000 per depositor, per account ownership type (Varo doesn’t offer joint accounts). 

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at [email protected].