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Want an online bank that offers a high rate of interest, no monthly fees and the ability to get your paycheck early? Then you may want to give Varo Bank a look.
In this article, we’ll examine how Varo Bank works, how you can access your money, how much interest you can earn and more.
Varo Bank is more than just a digital bank with no branches where you do you all your banking through an app.
Varo has also reinvented the idea of what banking should be like. It has eliminated a whole host of common bank fees from the equation. That means you’ll never pay any of the following with Varo:
* To qualify, you must make a minimum of five debit card purchases in a calendar month and have at least $1,000 in direct deposits.
Meanwhile, Varo also gives you the opportunity to get your pay up to two days early. More on that in a bit.
The account services that Varo offers are provided by The Bancorp Bank. You get FDIC insurance of $250,000 on your deposits through Bancorp.
However, Varo doesn’t offer some common products you might expect from a bank — like CDs or money-market accounts.
Finally, if you’re wondering about reputation, Varo has a B+ with the Better Business Bureau.
There are two kinds of accounts you can open with Varo: The Varo Bank Account and the Varo Savings Account. The first is a basic checking account. The second is a high-yield saving account.
To open either account with Varo, you begin simply by downloading the app either for Android or iOS.
Then tap “Sign Up” and enter your info.
The set-up process if fairly routine. You’ll enter your email and create a password. A six-digit verification code will then be sent to your email.
Next you’ll begin the bank account application in earnest. You’ll need to enter the following information:
You’ll also be asked to estimate your expected number of ACH transfers per month and expected ATM withdrawals per month.
If you run into any problems along the way, you can either drop Varo an email at help@varomoney.com or call their U.S.-based customer service number at 1-800-827-6526.
Varo gives you easy access to your money through any Allpoint ATM. With 55,000 machines and counting, Allpoint is the largest of the networks that are ATM surcharge-free in the nation.
You can find Allpoint ATMs at the following retail locations:
However, if you use a non-Allpoint ATM, you’ll be charged a $2.50 ATM withdrawal fee by Varo (effective February 19, 2020). And that’s in addition to whatever other fees are charged by the non-Allpoint ATM’s operator.
With Varo, money enters your account one of several ways:
That last method sets Varo apart from a lot of other online-only banks. You can make cash deposits at retail locations like 7-Eleven, CVS, Rite Aid, Walgreens, Walmart and more through Green Dot.
However, there is a charge for doing this that varies by retailer, plus a limit to how much you can deposit each day.
Retailer | Cost to Deposit | Daily Deposit Limit |
---|---|---|
7-Eleven | $4.95 | $500 |
CVS | $4.95 | $500 |
Dollar General | $3.95 | $500 |
Dollar Tree | $4.95 | $500 |
Rite Aid | $4.95 | $500 |
Walgreens | $4.95 | $500 |
Walmart | $3.74 | $1,000 |
One really nice feature of Varo is that you have the ability to get paid up to two days early with early direct deposit.
The exact timing with which you get your direct deposit depends on when your employer submits payroll files to the Federal Reserve. When that happens, the Fed will let Varo know how much money you should receive. Then Varo will deposit your money into your account up to 48 hours early.
“For most Friday paydays, we get the alert from the Fed on Wednesday, so you may get your money faster than your co-workers,” Varo notes online.
Varo offers a tiered interest rate on its savings account starting at 1.61% APY and going as high 2.80% APY. (Interest rates current as of May 12, 2020.)
However, if you want to earn that higher rate, you have to jump through a couple of hoops.
The higher rate can only be earned on balances less than $50,000. Any balances above $50,000 will automatically earn the lower interest rate.
Varo Bank is a bank best suited to people who are already comfortable with online banking. The ability to be paid early is nice if you’re the kind of person who often feels like there’s more month than money. And the savings account has the potential to pay a very high rate of interest.
However, if you’re used to making cash deposits regularly — say, you’re a bartender, server or someone else who gets tips — you’re going to lose a lot of money paying deposit fees. You have to decide if that might be a deal-breaker when it comes to this account.
The key is to know yourself and your banking habits. If Varo Bank doesn’t work for you, another online bank might. Be sure to read our piece on the Best Online Banks to see what’s available.
Meanwhile, you may also be interested in our articles on the 7 Best Free Checking Accounts and 8 of the Best Savings Accounts.
This post was last modified on May 12, 2020 9:41 am
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