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Varo Bank Review
Varo Bank at a glance
|Bank||Min Savings Deposit||Max Savings APY||1-Year CD Rate||J.D. Power Survey Score||Key Benefit|
|Varo Bank||$0||2.80%||Not offered||Not ranked||High APYs and no monthly fees|
What we like about it
The benefits of banking with Varo Bank include no overdraft fees, no monthly maintenance fees and no minimum deposits on accounts. Customers can bank fee-free at 55,000+ Allpoint ATMs and overdraw accounts by up to $50 with no fees or interest charged. Varo Bank is FDIC-insured for up to $250,000.
Varo Bank gives customers convenient access to early direct deposit by up to two days. An automated savings tool helps customers reach their savings goals faster, and Varo’s savings account APY is higher than most other banks. This bank uses heightened encryption to protect customer accounts and offers simplified banking products that make it easy to bank online securely.
Things to consider
A concern some reviewers have is that Varo has no physical branches. To deposit cash, customers need to use a third-party service that may charge fees for each transfer. Additionally, customers may not like the spending caps and ATM limits Varo sets up if bill payments — for example, a mortgage payment — exceed $2,500 daily.
An additional concern customers might have is customers cannot deposit checks remotely if they’re using Android devices. Customers also cannot write paper checks and will have to request that a check be sent to a business. This might be a learning curve for customers accustomed to paper checks.
Varo checking accounts
Varo offers checking accounts but no paper checks. However, accounts include a debit card, and transactions are conveniently displayed through push notification alerts. Customers can use their account to pay bills and transfer money. Account holders aren’t responsible for fraudulent purchases if they report them immediately.
Varo savings accounts
Savings accounts with Varo Bank are similar to traditional banks. Account holders can transfer money from their checking accounts, there are no minimum deposits, and customers can benefit from higher yields. The annual percentage yield, or APY, at Varo Bank is higher than what’s offered by most brick-and-mortar banks.
Customers can benefit from higher APYs if they meet a number of conditions. They must maintain a balance of $50,000 or lower, set up a direct deposit that’s over $1,000 monthly, and use their debit card at least five times a month. Other ways to save include rounding up transactions to the nearest dollar and using the Save Your Change feature.
Varo money market accounts
Varo Bank doesn’t offer money market accounts for its customers as they don’t use paper checks. Customers looking for a money market account online might want to check out Ally Bank. With Ally, customers can benefit from a competitive APY that’s higher than traditional banks but lower than Ally’s savings accounts.
Another benefit is that there are no minimum deposits for Ally’s money market accounts. Customers can make unlimited withdrawals and have unlimited deposits. However, they are limited to six free transactions monthly. After six transactions, a fee is assessed. That’s due in part to the federal regulations for online banks.
Varo Bank currently doesn’t offer certificates of deposit, also known as CDs. An option for a bank that offers CDs is U.S. Bank. With U.S. Bank, customers can benefit from higher interest rates and a fixed rate of return. The minimum deposit for opening a CD is $1,000, and US Bank CDs are backed by FDIC insurance.
Customers can set up different types of CD accounts with U.S. Bank. Options include the Trade Up CD and the Step Up CD, and a benefit of using US Bank when opening a CD account is that customers can open their CD online or they can visit a physical U.S. Bank branch.
Varo IRA accounts
Varo Bank does not offer IRA accounts at the moment. However, customers interested in IRA alternatives might want to explore IRA options with Wells Fargo. Customers can transfer their 401(k) into a traditional or Roth IRA account. Minimum deposits are $100, and there are no monthly fees.
WellsTrade IRAs have no opening deposit minimum and the $30 fee can be waived if certain conditions are met. Similarly, the Full Service Brokerage IRA account requires no minimum deposit and the $125 fee is avoidable. The Intuitive Investor IRA account charges a 0.50% annual advisory fee and requires a $10,000 minimum deposit.
Varo credit cards
Varo Bank does not offer credit cards as part of its services. Customers who want to explore credit card alternatives might want to check out Barclays Bank. Barclays has about 23 different credit card products, and customers can select Visa or MasterCard for their card type.
Barclays lets customers select credit cards that include cash back rewards, airline miles and other reward privileges. Customers can use points toward their purchases, like cash in the form of a check in the mail or for future bill payments. Customers can shop with brands like American Airlines, JetBlue, Holland America and Uber.