Varo Bank Review

Varo bank is an online bank with no physical presence that was founded in 2015. The mobile bank serves around 750,000 customers even though it doesn’t run any physical branch locations. It does, however, partner with the Allpoint network of ATMs that allow customers to take out cash without any extra charges. We like the bank’s no-fee policy and its high interest rates that compete with the best out there. For people who want banking on the go, Varo bank is a great option.


Varo at a Glance

  • Very high savings rate
  • No monthly fees
  • Well-rated mobile app
  • Comprehensive customer service
  • No physical branch locations
  • External fee for cash deposits
  • No checks


What’s interesting about Varo

Varo is a unique mobile bank. Between offering no-fee checking and a high-yield savings account, there’s little to hold against it. The bank partners with the Allpoint Network to provide over 55,000 free ATMs. Furthermore, if you use an ATM that is out of network, Varo doesn’t charge a fee — although the bank that operates the machine might.

Things to consider

Varo bank doesn’t give out checkbooks to its customers, so if you rely on check writing to pay your bills, you might look elsewhere. And although you can use the Varo app to deposit checks for free, cash deposits will cost you. The only way to deposit cash into your account is by going to a store that uses the Green Dot Network, such as CVS, Walgreens and 7-Eleven. The store can charge up to $4.95 to deposit the money for you.

Checking and savings accounts

Varo doesn’t require a minimum balance to open a checking account, and it doesn’t charge fees for maintenance, foreign transactions or transfers. A new feature is no fee overdraft, which allows an overdraft on up to $50 per month for qualifying accounts. So, if you accidentally overdraft by $40, you won’t have to pay that often hefty charge that comes in from most banks. You can qualify by:

  • Making five debit card purchases per month
  • Receiving a direct deposit of at least $1,000

For those who don’t qualify for no fee overdraft, your card will be declined, but there won’t be a tacked-on fee.

Varo’s savings account is one of the best — you can earn up to 2.80% with its high-yield account. You can qualify for this rate by:

  • Keeping your account balance under $50,000 (they are one of the only banks that has a maximum)
  • Making five debit card purchases per month
  • Signing up for direct deposit of $1,000 or more

Don’t qualify? Not to worry. You’ll still get a great rate of 2.02%. They also offer two features that can automatically transfer your change or a percentage of your paycheck into your savings account to build up an emergency fund without noticing.

Money market accounts

Varo bank only offers accounts for checking, savings and personal loans. If you’re looking to open a money market account, CIT Bank offers a great option. Its current APY is 1.85%, and it only requires a $100 minimum deposit. Also, it doesn’t charge a monthly service fee, but you are limited to six transactions per statement cycle.

Additionally, UFB Direct offers a fantastic rate for individuals who can maintain a high balance. The bank requires a $25,000 minimum for its best return of 2.00% APY. All lower balances get a not-so-great rate of 0.50%. If you have enough to meet the minimum requirement, that rate is worth looking into.


Varo bank doesn’t offer CD accounts. Other banks that have great CD options are Capital One and Marcus by Goldman Sachs.

Capital One’s current CD rate is 2.20% APY for a 1-year term. Interestingly, the rate is lower for their longer 3-year term, which sits at 1.65% APY. Capital One also doesn’t require a minimum deposit, so you can decide on the amount right for you.

A Marcus CD offers a similar 2.10% APY for a 1-year term. However, the longer you leave your money in the account, the more it will earn. A 3-year CD has a rate of 2.15%, while a 5-year CD has a rate of 2.25% APY. The most extended term they offer is six years, which carries a rate of 2.35% APY. Like with all CDs, though, you’ll incur a penalty if you withdraw the money early, so keep that in mind when deciding on term length.

Credit cards

Credit cards are another product that Varo bank doesn’t offer, which is a major drawback for customers seeking a full-service approach to banking. Some great credit cards that are currently available come from Discover Bank and Chase Bank.

The Discover It card is one of the best for customers looking to transfer a balance from other high-interest credit cards. Their 0% interest introductory rate lasts 18 months, which is longer than many of its competitors. Transferring high balances with higher interests to this card would give you more time to pay down your debt, interest-free.

For reward seekers, check out the Chase Freedom card, which comes with no annual fees. Customers can earn 5% cash back on qualifying purchases up to $1,500 each quarter — plus an unlimited 1% back on all other purchases. Moreover, you receive a $150 reward after spending $500 in the first three months.

Personal loans

As a money management institution that focuses on checking and savings accounts, Varo Bank does not offer any personal loans of any kind. This is pretty standard for challenger banks that haven’t yet expanded its banking products. If you need a personal loan to fund a wedding, pay for travel, cover moving and relocation expenses or more, try LightStream, the lending division of SunTrust Bank. With LightStream, customers can use the funding to finance a variety of situations while still enjoying relatively low interest rates. Of course, every loan origination depends on your credit history and credit score, but its website has a handy chart of what rates you could expect with each personal loan amount and term length.

Mortgage loans

Again, Varo Bank doesn’t offer any sort of lending products, so it also does not have mortgage loan products. For prospective homebuyers, it’s worth it to look into Rocket Mortgage by Quicken Loans. As the first mortgage originator to take everything online, Rocket Mortgage has streamlined and simplified the mortgage lending process, making it easier for customers to fund the home of their dreams. The interest rates are average — what customers really gain when they buy a home with Rocket Mortgage is ease and simplicity.

Mortgage refinancing

Varo Bank is not in the mortgage refinancing business. If you’re looking to refinance your mortgage, look into Rocket Mortgage by Quicken Loans. You can do everything online and since Quicken Loans is the largest mortgage provider in the country they have plenty of options to choose from.

Home equity loans & HELOCs

As with other loan products, Varo Bank does not offer home equity loans or HELOCs. Plenty of other banks do, though, including Axos Bank, which allows you to choose between a fixed or variable rate on your line of credit. Everything can be done online with Axos, which makes the process easy to manage.

Car loans

Additionally, Varo Bank does not offer loans to finance vehicle purchases. A popular lender for auto loans is Carvana. It has almost no credit requirements; customers just need to show that they make at least $10,000 in annual income. It’s important to note that all of these cars will be used cars. However, that may not bother those looking to finance a vehicle that’s had a little wear and tear since it will cost less.

The final word

Who would be a good fit for Varo bank? To get the most out of Varo bank, you need to be confident with banking online. And for those who are, Varo offers many incentives. If you’re looking to combine your checking and savings into one without sacrificing the opportunity to earn high interest, a Varo account could be right for you.

Who might want to skip Varo bank? Anyone looking for more than a checking and savings account option will want to look elsewhere. And if you use cash a lot — perhaps if you receive the bulk of your pay in cash tips — Varo wouldn’t be the best fit for you since there’s a fee to deposit it. Furthermore, if you own an Android phone, Varo’s app doesn’t yet allow you to make mobile deposits from your phone, so that’s something to consider.