Varo Bank Review (September 2024) (2024)

Founded in 2015, Varo Bank became the first consumer banking fintech to become a nationally chartered bank in 2020. The online bank is known for its checking and high-yield savings accounts, but it also has a secured credit card and a cash advance service.

In this Varo Bank review, we at the MarketWatch Guides team walk through the bank’s account offerings and services to help you determine if it’s right for your personal finance goals.

Our Varo Bank Ratings

We give Varo Bank 4.5 out of 5 stars after researching categories including its branch availability, account fees, interest rates and customer support. The bank’s checking and savings accounts both earn high marks.

Varo’s overall experience receives a lower score since the bank doesn’t have in-person branch access or offer banking products such as certificates of deposit (CDs) or money market accounts.

Here’s how the company scores in each of these factors:

Overview of Varo Bank: Pros and Cons

Despite only existing since 2015, Varo Bank has built a reputation as a top online bank. Varo can offer benefits you won’t receive from a traditional brick-and-mortar bank, such as high rates and no fees, but it’s also missing some of the features that come with traditional banks, such as in-person service.

Varo Bank offers two simple banking products: a checking account and a high-yield savings account. Outside of bank accounts, Varo offers two other products and services for consumers:

• Varo Advance: Varo Advance allows eligible customers to access cash advances of up to $500. The bank charges a flat fee of $1.60 to $40 for the service based on the amount borrowed.
• Varo Believe: The Varo Believe secured credit card is for customers interested in building credit. It lets you set your credit limit, and there’s no minimum security deposit, interest charges or fees. Also, a credit check isn’t required to apply for the card.

Who Is Varo Bank Best For?

Despite its limited offerings, Varo Bank can be a good choice for someone who wants a simple online checking and savings account with no fees or minimum balance requirements. You can’t get a savings account without a checking account, but the savings account comes with a high APY and automated savings tools.

Varo Bank Accounts

The Varo bank account is the bank’s lone checking account, and it’s required to access any of the bank’s other accounts and services. After you open a Varo bank account, you’ll have the option to open a Varo savings account, which is a high-yield savings account. Both deposit accounts are FDIC-insured.

Varo Bank Checking Account

Varo Bank Checking Account Overview

We give Varo’s checking account 4.7 stars. It can be a great option for savvy consumers who are comfortable banking digitally and want to avoid paying monthly fees.

Pros and Cons

Pros

• No fees: The Varo bank account has no monthly fees, overdraft fees or ATM fees for in-network Allpoint ATMs.
• Debit card rewards: Earn up to 6% cash back when you use your Visa debit card with eligible brands.
• Zelle integration: You’ll have access to free money transfers through Zelle.

Cons

• Out-of-network ATM fees: Varo charges a $3.50 fee per transaction for using out-of-network ATMs.
• Cash withdrawal fees: A fee of up to $5.95 per transaction may apply for cash withdrawals at participating Green Dot retailers, and Varo charges $2.50 per transaction for over-the-counter cash withdrawals at banks.
• No paper checks: This account doesn’t come with paper checks.

Varo Bank Checking Account

The Varo bank account has no minimum deposit requirement and no monthly service or overdraft fees. Customers have access to additional perks such as early direct deposit (which lets you receive your paycheck up to two days sooner) and access to over 40,000 fee-free Allpoint ATMs. Plus, account holders can earn up to 6% cash back on debit card purchases with select brands.

While Varo customers enjoy fee-free ATM withdrawals at in-network ATMs, they could face extra charges with cash deposits and out-of-network ATMs. Account holders can make cash deposits at participating Green Dot retailers, but you may pay a fee of up to $5.95 per transaction. Varo also charges $2.50 per transaction for over-the-counter cash withdrawals at banks.

Varo Bank Savings Account

Varo Bank Savings Account Overview

We score Varo’s high-yield savings savings account 4.5 stars because it can be a great option for people who want to maximize earnings on their deposits. Note you first must open a Varo bank account to be eligible to open a savings account.

Pros and Cons

Pros

• Competitive baseline APY: This account’s baseline APY is more than six times the national average savings rate of 0.50%.
• No fees or minimums: There’s no monthly service fee or minimum balance requirement to earn the baseline APY.
• Automated savings tools: Varo’s savings account has a tool that automatically rounds your purchases up and saves your change and a tool that automatically saves a percentage of your paycheck.

Cons

• Not a standalone account: If you want to open a savings account, you have to open a Varo checking account first.
• Terms for earning the highest APY: To earn the savings account’s highest APY, you must set up qualifying direct deposits and maintain a positive balance in your checking and savings accounts each month.
• Cap on APY: The account’s highest APY only applies to the first $5,000 in the account after terms are met.

Varo Bank Savings Account

With Varo’s savings account, customers start out earning a baseline APY on all balances. They can earn the bank’s highest APY on balances up to $5,000 by meeting the following requirements each month:

• Receiving qualifying direct deposits totaling $1,000 or more
• Ending the month with a positive balance for both the Varo bank account and savings account

Any additional balance above $5,000 will earn the lower rate. Regardless of your balance, you’ll earn a much higher savings rate than the national average and many online banks’ rates.

Varo also provides two automatic savings tools:

• The Save Your Change feature rounds up debit card purchases to the nearest dollar and transfers the extra change to your savings account.
• The Save Your Pay feature allows you to transfer a percentage of your direct deposit paychecks automatically to your savings account.

Varo Bank Reputation and Customer Satisfaction

The Better Business Bureau (BBB) gives Varo Bank an A- rating, and the bank has been accredited with the BBB since 2018. The average customer review score is a little over 3 out of 5 stars, based on more than 190 customer reviews. Positive reviews tend to praise the bank’s secured credit card, bank account perks and mobile app, while many negative reviews complain about customer service, unexplained account closures and issues with transferring money.

Varo Bank earns 3 out of 5 stars from Bauer Financial, an independent banking research firm. The rating is based on a financial institution’s capital ratios, profits and losses, the level of delinquent loans, liquidity and other factors.

Varo’s mobile banking app, available for iOS and Android, receives high marks from users. It earns 4.9 out of 5 stars in Apple’s App Store, based on over 204,000 ratings, and 4.7 out of 5 stars in Google Play, based on more than 223,000 ratings. For both apps, positive reviews tend to praise the bank’s perks, such as a lack of fees, while negative reviews tend to focus on customer service, app glitches and money transfer delays.

Varo Bank vs. Top Banks

With a no-fee checking account and a high-yield savings account, it’s easy to see why Varo Bank is a popular option. Despite its benefits, though, another bank may be a better choice depending on your financial needs.

Ally Bank is another online bank to consider if you prefer online or mobile banking. Ally’s checking account offers similar benefits, and its savings account offers a competitive APY on all balance tiers. If you’re looking for a full-service bank, Ally also offers CDs, a money market account, credit cards, loans and investing products.Generally, traditional, large banks don’t offer the competitive rates seen with online banks. Still, banks such as Chase, Wells Fargo and Bank of America are better options for consumers who prefer in-person support. They also offer more account options to meet varying banking needs, while Varo only has one checking account and one savings account.

The Bottom Line: Is Varo Bank Right for You?

Varo Bank can be a worthy choice if you’re comfortable with online banking. If you meet its requirements for its highest savings APY, you’ll earn more on your balance with Varo than with traditional, brick-and-mortar banks — and even some online banks and credit unions.

However, you must open a checking account to access a savings account, so Varo may not be ideal if you already have a checking account you like or if you’re only interested in a savings account. Still both accounts are worth considering if you want to earn high yields on your deposits.

Our team researched more than 100 of the country’s largest and most prominent financial institutions, collecting information on each provider’s account options, fees, rates, terms and customer experience. We then scored each firm based on the data points and metrics that matter most to potential customers. Read our full methodology.

*Data accurate at time of publication