Varo Bank Review – Forbes Advisor – Forbes

If you’ve never used an online-only bank, you might be worried about whether it’s truly as convenient as banking at the branch in your neighborhood. Varo offers plenty of capability for the on-the-go user that may convince you to take the online route.

If you’re looking to complete basic checking and saving transactions while going about your daily life, Varo makes it easy to bank via its mobile app and a broad ATM network. At all times, your online banking information is protected by 256-bit AES encryption.

Here’s what you should know about Varo’s account offerings.

Account Basics

Varo Bank Account (Checking)

Varo’s online checking account—known as the Varo Bank Account—doesn’t charge monthly maintenance fees, and you don’t need to keep a minimum balance in your account. A government-issued I.D. and Social Security number are required for sign-up, but no minimum deposit is required to open your account. You must be 18 and have a device that can access Varo’s mobile app.

Varo promotes early access to direct deposit payments. It usually posts deposits on the same day they’re received, “which may be up to two days earlier than the payer’s scheduled payment date,” according to the Varo website. This means that—for most Friday paydays—the funds may be available on Wednesday.

Varo offers No Fee Overdraft, which allows you to overdraw your checking account by up to $50 when making a debit card purchase. There are no fees or interest charges, but you do have to meet two requirements to be eligible:

• You must make five debit purchases per month, and
• You must receive payroll or government direct deposits of at least $1,000 per month.

You must enroll in No Fee Overdraft in the Varo app before the feature is activated. If you overdraft your account, you have 30 days to pay the amount back, which Varo automatically takes from your next direct deposit.

You can send money to other Varo users without fees with the Varo to Varo instant transfer feature. At this time, you can’t use your Varo account to make wire transfers.

Varo Savings Account

Once you open a Varo bank account, you have the option to open a Varo savings account. There’s no minimum deposit to get started and no minimum account balance you must maintain. If you have at least a penny in your savings account, you’re eligible to earn interest.

The account currently offers an 0.81% annual percentage yield (APY). Varo offers an option to earn a substantially higher APY of 2.8%, after meeting certain monthly requirements. To qualify for the higher rate, each month you must:

• Make at least five qualifying debit card purchases, and
• Receive direct deposits of $1,000 or more (from payroll or government sources), and
• Maintain a daily account balance of no more than $10,000.

Two automatic savings tools are available in conjunction with the Varo bank accounts:

• Save Your Pay lets you set up a recurring transfer from checking to savings each time you receive a direct deposit payment. You choose the percentage of your payment you want to move to savings.
• Save Your Change rounds up each checking transaction to the nearest dollar, and moves the extra cents to your savings account.

Access on the Go

Varo bank accounts come with a Visa debit card. You can add it to your Apple Pay or Google Pay mobile wallet. The debit card has a $2,500 spending limit per calendar day.

There’s a $750 daily cash withdrawal limit from ATMs and a $500 per day cash back limit from retailers. You can withdraw both ways in one day, as long as the total amount doesn’t exceed $1,000.

Varo customers have access to Allpoint ATMs (located in major retailers like Target, CVS and Circle K, to name a few) for cash withdrawals with no fees, and you can get cash back at some store registers when you make debit purchases. If you use an ATM outside the Allpoint network, Varo charges $2.50 per withdrawal (the ATM operator may set their own fees on top of that).

If you want to deposit cash, you can use the Green Dot Reload@theRegister service, available at various retail locations—a retail service fee of up to $5.95 applies. If you have direct deposit set up on your checking account, you can also deposit checks via the app.

The Varo app is available for iOS and Android. The app currently is rated 4.8 out of 5 stars at the App Store and 4.5 out of 5 at Google Play. You can set up push notifications for deposits and withdrawals, along with notifications for debit purchases.

If you misplace your card, you can lock it from the Varo app so it can’t be used. Replacement cards sent by USPS are free; expedited shipping is available for $25.00.

The Varo customer service team is available at help@varomoney.com or 1-800-827-6526 Mon–Fri, 8 a.m. to 9 p.m. ET and Sat–Sun, 11 a.m. to 7 p.m. ET (excluding federal holidays).

Pros

• No minimum balance required to open an account
• Access to large Allpoint ATM network
• Highly rated mobile apps
• Two automatic savings tools
• Attractive savings APY so long as you meet the requirements
• Future expanded services, now that Varo has its national bank charter

Cons

• High-yield savings account only available to checking account holders
• Varo to Varo transfer is only available if both parties are Varo customers
• 24/7 customer service is not available if you have an account issue

How Varo Stacks Up

Varo is a convenient option for someone with fairly straightforward finances. If you plan to use it as your primary checking and savings account, you’ll enjoy the greatest benefits. But if you intend to use it as a secondary account and don’t plan for a steady stream of transaction and deposit activity, you’ll miss out on perks like a higher-yield savings rate and overdraft protection.