Varo banking review: An online account with perks

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Varo checking account at a glance

Physical locations None.
Getting started Simple — there’s no credit check or minimum balance to open your account.
Monthly service fee None.
Overdraft fees None.
Other fees

Out-of-network ATM fee: $2.50 per withdrawal (you may also be charged a fee from the ATM operator). 

Cash deposit fee: You may face a $4.95 or $5.95 merchant fee for cash deposits at Green Dot retailers.

How to deposit Direct deposit, external transfers, mobile check deposit, Varo-to-Varo transfers, cash deposits at select locations.
How to withdraw/pay ATMs, contactless debit card and Varo-to-Varo transfers.
Notable feature Get up to 6% cash back when you use your Varo Bank debit card at    certain brands. Varo will automatically transfer cash back in your Varo Bank Account every time you reach $5.

Varo Bank, formerly known as Varo Money, is an online-only bank with no physical branches, no monthly service fee and no overdraft fees. It also offers some unique perks, such as a cash-back debit card and early access to paychecks.  


4 things to know about a Varo checking account

1. Early paycheck access and cash advances

Varo offers a couple of ways to access money if you run into a cash crunch. Its early direct deposit program may allow you to access your paycheck up to two days early. 

The Varo Advance feature allows qualifying customers to borrow up to $100 in the app. While there’s no interest, fees range between $0 to $5, depending on how much you borrow.      

Plus, you’ll have to meet eligibility requirements such as having a Varo Bank account that’s at least 30 days old, with at least $1,000 in qualifying direct deposits to a Varo account in the past 31 days.

2. Attractive savings options

A no-monthly-fee checking account is a great starting point if you’re working hard to save every dollar you can — but Varo also offers a savings account with an attractive annual percentage yield (APY). You’ll start by earning 0.50% APY and can qualify to earn up to 5%.

Just keep in mind that while there’s no minimum balance to open a Varo s     avings account, there are minimum balance requirements to earn interest.     

Varo also offers tools to help you save more. There’s “Save Your Pay,” which takes a percentage of your direct deposits and transfers it to your savings account. And there’s “Save Your Change,” which rounds up every transaction to the nearest dollar and transfers the amount to your savings account. 

Varo also offers unlimited transfers out of your savings account to a connected Varo account.

With these perks, you can get more out of your Varo checking account if you pair it with a savings account.

3. Limited cash deposit options

Outside of direct deposit, your options for depositing cash with Varo are somewhat limited — and they’ll cost you in fees. 

First, you cannot deposit cash directly into a Varo savings account. Instead, you must deposit it into your Varo checking account, then transfer the funds using the app.

To deposit cash into your Varo checking account, you must either go to a participating Green Dot location and add cash at the register (up to a $4.95 merchant fee) or buy a Green Dot MoneyPak ($5.95 merchant fee). 

Varo also limits cash deposits to $1,000 per day with a maximum of $5,000 per month, and certain Green Dot locations may have their own limits on how often or how much cash you can deposit.

4. Second-chance banking

If you’ve been denied a bank account because of repeated overdrafts, unpaid overdraft fees or other issues, Varo’s second-chance banking may allow you to get back into the banking system. 

Varo doesn’t use reports from ChexSystems to determine whether to allow someone to open an account. It also won’t check your credit.

Are Varo Bank and Varo Money the same?

Varo began as a mobile banking startup focused on helping customers manage their money and reach their financial goals. In 2017, the company applied to form Varo Bank.            

Does Varo give you free money?

Varo offers an attractive cash-back program that allows customers to earn as much as 6% cash back when they use their Varo debit card with select brands     . Whenever you reach $5, Varo automatically transfers the cash back to your account.  

Not sure if Varo is right for you? Consider these alternatives.

  • Capital One 360: Capital One’s free online checking account offers paper checks for a fee, making it a potential alternative if you want this feature.  
  • Wells Fargo: With lots of branches nationally, this may be worth considering if you’re more comfortable with in-person banking — but be sure to check their monthly fees and minimum balance requirements.            


About the author: Beth Deyo is a personal finance freelance writer with a bachelor's degree in Finance from the University of South Florida. She is also a Certified Financial Planner™ with 14 years of wealth management experience. She … Read more.