Is Varo A Real Bank? (Explained)

is varo a real bank

Low costs, high APYs, and easy-to-use digital banking tools are standard features of online banks. Varo has been a part of many top 10 online banking apps and is rapidly growing in popularity. However, not everyone is entirely familiar with Varo and if it really operates like a bank or not. With that said, is Varo a real bank?

Varo Money is the first challenger bank to earn a national charter in July 2020, fulfilling its objective of becoming “the first mobile-centric national bank in U.S. history.” Varo Bank N.A. can retain its deposits, formerly handled by The Bancorp Bank from 2017 to 2019.

If you’ve never used an online-only bank before, you might be unsure if it’s as handy as banking at a local branch. Varo has a lot of features for on-the-go users that can persuade you to go the online path. So, how does Varo work?

How Does Varo Offer You Their Banking Services?

After Varo became the first US digital-only full bank (i.e. “real bank”), it widened its product line. Varo Bank N.A.’s banking license allows offering all the services that regular banks do, including savings accounts and lending.

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Varo Bank’s services are exclusively based on the brand’s mobile apps for Apple and Android devices. Varo features a unique pricing structure that includes no monthly maintenance, foreign transaction, transfer, or debit card replacement fees

The bank also has a nominimum policy, which means you can apply for an account regardless of your deposit amount.

Varo offers competitive interest rates, which are a crucial selling point for any bank. The Varo Savings Account offers a 0.50% annual percentage yield (APY). When you combine this rate with Varo’s price structure, you’ll be able to save a large amount of money. 

Furthermore, if you complete the following monthly requirements, you can receive up to a 3.00% APY:

  • For the calendar month, keep account balances above or equal to $0.00.
  • Each qualifying period, get a total direct deposit of $1,000 or more.
  • For the calendar month, do not exceed a daily savings balance of $5,000.

You might be wondering how a mobile-only bank like Varo allows you to withdraw cash. The bank has joined the Allpoint ATM network to address this issue, including over 55,000 fee-free ATMs across the United States. Varo’s app has an ATM location if you’re not sure where to find an Allpoint ATM. 

If you use a non-Allpoint ATM, Varo charges a $2.50 out-of-network ATM fee.

Varo Check Account Simplified

Varo’s online checking account, known as the Varo Bank Account, has no monthly maintenance fees and no requirement to maintain a minimum amount. Signing up requires a government-issued photo I.D. and your Social Security number, but no minimum deposit is required. 

In order to use Varo’s mobile app, you must be at least 18 years old and have a smartphone. Varo encourages early direct deposit payments. On Varo’s website, deposits are typically posted the same day they’re received, even if the payer’s planned payment date is two days after the deposit is received. 

It means that the monies may be available on Wednesday for most Friday paydays. With Varo’s No Fee Overdraft service, you can overdraw your checking account by $50 when you use your Varo debit card. There are no fees or interest costs, but you must meet two criteria to qualify:

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

Before the service is implemented, you must enroll in No Fee Overdraft via the Varo app. If your account is overdrawn, you have 30 calendar days to pay it back, which Varo will deduct from your next direct deposit.

With the Varo Bank to Varo Bank instant transfer option, you can send money to other Varo users without incurring any costs.

Here are some of the products Varo offers:

Varo Bank Account:

  • There are no monthly fees, foreign transaction fees, transfer costs, or debit card replacement fees.
  • There are no requirements for minimums.
  • More than 55,000 Allpoint ATMs are available to you.
  • There is no possibility of earning interest.
  • $50 referral rewards

Varo Savings Account:

  • Get a 0.50 % annual percentage yield.
  • If you meet specific criteria, you can upgrade to a 3.00 percent APY.
  • There are two options for automated savings.
  • There are no monthly or hidden costs.
  • To receive APY, you must have a minimum balance of $0.01

Additional Accounts And Services

Varo Bank is expanding its checking and savings account offerings. The Varo Advance program, for example, provides you with a tiny cash cushion to help you avoid overdrawing your account. Varo Believe will also offer a specific program to help Varo customers develop credit, still described as “coming soon” on the Varo Bank website.

  • Varo Advance:

Customers must have an active Varo Bank Account that is at least 30 days old and have received at least $1,000 in direct deposits to either the Bank Account, Savings Account, or both combined within the previous 31 days to be eligible for the Varo Advance program.

Varo Advance provides you with up to $100 in cash immediately, which you must repay within 30 days. Regular fees, which range from $0 to $5 depending on the Advance amount, had been applied from May 13 onwards. At any given time, Varo customers can only have one advance outstanding.

  • Varo Believe:

The Varo Believe initiative, which is still in the works, aims to help Varo Bank account members build credit by providing a credit card with no upfront deposit, no monthly fees, and annual percentage rates. Your credit score is unaffected by applying for the card.

The Believe program credit card will work in concert with your Varo Bank Account, which will set aside funds in real-time as the user makes purchases, withdraws cash from ATMs, or receives money back when making a transaction into a Vault Account. 

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Varo will set these funds aside to pay off the credit card debt in whole within the schedule. Varo will inform the three major credit bureaus about your payment history.

Day To Day Varo Use

Visa debit cards are included with all Varo bank accounts. Apple Pay and Google Pay are supported, and you can spend up to $2,500 each day with a debit card.

ATM withdrawals are limited to $750 per day, while cashback from shops is limited to $500 per day. You can withdraw both methods in a single day if the total amount is less than $1,000.

Customers with Varo enjoy no-fee access to more than 55,000 Allpoint ATMs (found in significant shops like Target, CVS, and Circle K, to mention a few), and you can get cashback at some store registers when you make debit transactions.

Varo costs $2.50 for each withdrawal if you use an ATM not part of the Allpoint network; however, the ATM operator may set their fees on top of that.

You can deposit cash via the Green Dot Reload@theRegister service, which is accessible at various retail locations for a cost of up to $5.95. You can deposit checks using the app if you have a direct deposit set up on your bank account.


Varo is a good choice for someone who has a stable financial situation. You’ll get the most out of it if you utilize it as your primary checking and savings account.

However, suppose you plan to use it as a secondary account without expecting a continuous stream of transaction and deposit activity. In that case, you’ll miss out on benefits like a higher-yielding savings rate and overdraft protection.

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As a Current mobile banking app affiliate, I earn from qualifying purchases.
topmobilebanks logo

Current: The Future of Banking

As a Current mobile banking app affiliate, I earn from qualifying purchases.