Varo Savings Account Review: Excellent Earnings on Beginner Savings

Varo Savings Account at a glance

APY	3.00% (as of 6/14/24) at account opening, 5.00% (as of 07/01/24) once you meet certain criteria1
Minimum/maximum account balance for APY	No minimum balance required, but the maximum balance for the 5.00% (as of 07/01/24) APY is $5,000
Minimum deposit to open account	None
Monthly maintenance fees	None
ATM access	Only after transferring funds to your Varo Bank Account, which provides free ATM withdrawals at over 55,000 Allpoint ATMs
Transactions per month	Unlimited
FDIC insured	Yes

The Varo Savings Account's main selling point is its high APY, but qualifying for the top 5.00% (as of 07/01/24) rate does require jumping through a few hoops. I don’t love the fact that you have to open a Varo checking account alongside your savings, and each month you must receive at least $1,000 in direct deposits.

The $5,000 balance cap is the account's most glaring limitation. Once you exceed that threshold, the portion of your balance above $5,000 will only earn 3.00% (as of 6/14/24). While that's still a respectable rate, it's a notable drop from the headline APY and means this account is really best suited for modest savers.

On the plus side, Varo doesn't charge any monthly fees or require minimum balances for the savings or checking account, making it a low-cost option. You also get convenient features like mobile check deposit and automatic savings tools.

How much can your savings earn?

So you’re checking out high-yield savings accounts! Congratulations! This is a fabulous tactic for stashing your emergency fund, since you can access the money anytime without penalty (though with Varo you are limited to six withdrawals per month).

You can earn significantly more on your savings with a robust APY like the Varo high-yield savings account, compared to a traditional savings account. The FDIC notes that the average savings account APY was just 0.45% (as of 10/21/24).

Take a look at how that rate compares to the maximum 5.00% APY with Varo. (We’ll use $5,000 since that’s where the maximum earnings stop, and assume you leave the funds alone for up to 10 years.)

With a traditional savings APY of 0.45% (as of 10/21/24), $5,000 only earns about $22 in one year, while with a Varo 5.00% (as of 07/01/24) APY, your $5,000 earns more than $236 in one year.

The major downside with this account is that beyond $5,000, any additional balance in Varo Savings will earn only 3.00% (as of 6/14/24) APY. But that is still much higher than an account that earns less than half a percent, so it’s not a terrible option.

Useful Varo banking features

Within the Varo Bank Account and Varo Savings Account, the fintech platform offers several other perks that make your financial life more convenient.

Instant transfer

Are you someone who frequently goes out with friends and needs to split the bill? That can be such a hassle, but Varo is one of the apps you can use to easily send money to someone else. I could use the instant transfer feature to send birthday money to my college-aged nieces and nephews, for example, or pay back my friend for my share of our recent trip to Boston.

With a Varo account, you can send and receive money whether the other party uses Venmo, Chime, Zelle®, or a U.S. bank. Amount limits may apply, and make sure that if your recipient doesn’t have Varo, they know to accept payment within 14 days, otherwise it will be returned to your account.

Automated savings tools

One of the cardinal rules (for me, anyway) of how to save money is that it has to be automated. Otherwise, I’d just haphazardly throw a sum of money into savings whenever I thought of it, which might be every month, but would more likely be sporadic — going three months or six months or longer without contributing anything.

Automated saving is simple with Varo, as it instantly rounds up purchases with its Save Your Change feature. If you spend $32.55 at a restaurant, the extra $0.45 goes straight into your savings. That can add up over time.

You also can easily arrange automatic savings from every paycheck or every month. Indicate the percentage you want funneled into your Varo Savings Account, and it’s done until you turn the feature off or change the amount.

Free Varo debit card

You can use your digital debit card right away after opening your account, plus you’ll get a physical debit card.

No monthly account fees

Varo Bank Accounts and Savings Accounts are fee-free, so there’s no charge to do your checking, debit, and savings with Varo. Plus, you won’t be charged fees for debit card purchases, check deposits, or transactions at over 40,000 ATMs.

Other no-fee features:

• No overdraft fees
• Free Zelle® or Varo-to-Varo transfers
• No minimum balance fees
• No foreign transaction fees

There are just a few fees you do want to be aware of:

• $3.50 per non-Allpoint ATM transaction
• $2.50 per over-the-counter cash withdrawal (from Varo Bank Account)
• $1.60 and up for Varo Advance

Who is Varo Savings best for?

Varo is a good fit for savers who are just starting to build up savings and can easily meet the direct deposit and debit card usage requirements each month. If you tend to keep modest savings balances under $5,000, Varo lets you maximize your earnings on that money with minimal fees.

You also can benefit from Varo’s HYSA if you want to keep your checking and savings within the same platform, and you like the automated features it has. Round-ups on purchases that go automatically into savings, plus set-it-and-forget-it savings deposits can help you increase your savings balance effortlessly.

Who should look elsewhere for savings

While the Varo Savings Account has some great features to help you grow your money and easily transfer money to others, it’s not ideal for everyone.

As mentioned previously, since the high APY only applies to the first $5,000 in your account, you may want to find a different HYSA if you plan on keeping much more than that in savings. I like to have $10,000 or more in savings, so it wouldn’t make sense for me to use Varo as a lot of my balance would earn a lower APY of 3.00% (as of 6/14/24).

Of course, if you prefer working with a brick-and-mortar bank, Varo isn’t for you. It’s not a bank, first of all, and there aren’t any physical branches to visit.

How to open a Varo Savings Account

You’ll have to open both a Varo Bank Account and a Varo Savings Account to gain access to the savings options. You must also download the Varo banking app for iOS or Android to open, fund, or use either type of account.

How to add money to your account

There's no minimum deposit to open an account and no hard credit check. Once your account is open, you have several options to fund both your Varo Bank and Varo Savings accounts, including:

• Transferring funds through an ACH transfer from an outside financial institution
• Depositing checks using your iOS or Android app or by mailing a paper check
• Moving funds from your Varo Bank Account to your Varo Savings Account
• Setting up direct deposit
• Depositing cash at one of 90,000 Green Dot locations (Note: Varo doesn’t charge a fee for this service, but the participating Green Dot location may charge you up to $4.95 depending on the deposit method)

You may deposit up to $1,000 in cash per day, with a maximum of $5,000 in any given month.

How to withdraw money from your account

To withdraw funds from your Varo Savings Account, your only option is to move the money to your Varo Bank Account.

Once you’ve done that, you can withdraw up to $1,000 per day using the Varo Bank Visa® Debit Card or Varo Believe card. You can withdraw funds at an ATM, use your Varo debit card for purchases, issue checks from your account through the Varo app, or transfer funds to another financial institution.

One thing of note is that you used to be limited to six savings withdrawals per month, but Varo no longer enforces this limit.

Varo customer service

What if you need to reach someone to dispute a transaction or handle technical issues? Varo provides customer service to account holders via phone and email. You can contact Varo at:

• help@varomoney.com
• 1-877-377-VARO
• Click varomoney.com/support for an online help form.

There’s no online chat, and there are no local branches you can visit. You also must use the mobile banking app to access many features of your account(s), as you’re limited in what you can do on your website browser.

Other Varo accounts to consider

If you’re looking at opening a Varo Savings Account, it’s a good idea to know about Varo’s other financial account offerings. They are especially well-suited to those who are early in their money journey.

Here’s a quick glance at the what you can do with Varo:

• Bank account: Receive your paycheck up to 2 days early with direct deposit.
• Varo Advance: As a banking customer with Varo, get a one-time cash advance up to $250 for initial instance, up to $500 over time.

Alternatives to Varo Savings Account

While Varo's 5.00% (as of 07/01/24) APY on balances up to $5,000 is certainly attractive, there are other high-yield savings accounts that may better suit your needs, especially if you have a larger balance or prefer a bank with physical locations:

Revolut

Revolut is a neobank that offers similar savings APYs and features to Varo’s Savings Account. The account earns you up to 3.25%-4.25% (as of 07/01/24) APY. Be sure your earnings and other features are worth the monthly fee before signing up. Like Varo, Revolut also rounds up purchases to the nearest dollar to add to your savings.

SoFi® Checking and Savings

I’d definitely take a minute to check out SoFi’s Checking and Savings account. It’s a true one-stop shop for your checking and savings needs. With qualifying direct deposits, you can earn up to 4.20% APY on your savings balance, which is slightly lower than Varo's top rate but without any balance cap (so much simpler!).²

One way you’ll find SoFi’s account beats out Varo Savings is that there’s no minimum amount for your direct deposits to qualify for the high APY. (Or you can direct deposit $5,000 every 30 days to qualify.)

SoFi® also doesn't charge any monthly fees, minimum balance fees, or overdraft fees. As an online bank, it offers perks like early paycheck access.³.⁴

SoFi is a Member, FDIC. ⁵

Visit SoFi or learn more in our SoFi Checking and Savings review.

Marcus Online Savings Account

Another option for earning a significant rate on your savings is the Marcus Online Savings Account from Goldman Sachs. Although the APY of 4.40% (as of 07/22/24) is lower than Varo’s, you earn that rate with no minimum balance and no direct deposit requirements, so for people like me who don’t have direct deposit as an option, you could try this high-yield savings account.

FAQ

Bottom line

The Varo Savings Account offers an industry-leading APY for savers who don't mind keeping balances under $5,000 and who can meet monthly direct deposit requirements. For beginning savers who want to avoid account fees, it's a strong choice. Plus, it’s a nice shift from some accounts that require a high minimum balance to earn the maximum APY.

However, I wouldn’t recommend this account if you plan on racking up a higher savings balance, since other HYSAs offer competitive APYs without the $5,000 limit. Consider your savings goals and banking preferences to decide if Varo's high-yield savings account makes sense for you.