Varo Bank Savings Review 2026
5.00% APY is the highest rate advertised anywhere. But read the fine print before you get excited.
⚠️ The 5% Rate Has Conditions
+ $1,000/mo direct deposit
with direct deposit
without direct deposit
⚡ Quick Verdict
Varo's 5% APY is real—but it only applies to your first $5,000 and requires $1,000+ monthly direct deposits. For small emergency funds with regular paychecks, it's genuinely excellent. For larger savings or anyone without traditional employment, the 3% fallback rate is below competitors. Know what you're signing up for.
✓ Pros
- • Industry-leading 5.00% APY (on $5K)
- • No monthly fees or minimums
- • Full mobile banking features
- • Early direct deposit (2 days)
- • Fee-free overdraft up to $250
- • 55,000+ fee-free ATMs
- • Actual bank (not fintech wrapper)
✗ Cons
- • 5% limited to first $5,000
- • Requires $1,000/mo direct deposit
- • 3% base rate below competitors
- • No desktop website (mobile only)
- • Limited customer service hours
- • No joint accounts
- • No CDs or additional products
Understanding Varo's Rate Structure
Varo advertises "5.00% APY"—the highest rate you'll see anywhere. But the structure is more complex than a simple flat rate:
To Get 5.00% APY, You Need:
- Receive at least $1,000/month in qualifying direct deposits
- The 5% applies only to your first $5,000
- Amounts over $5,000 earn 3.00% APY
Without Direct Deposit:
- Your entire balance earns 3.00% APY
- No tiering—just a flat 3% on everything
Real-World Math
Let's calculate what you'd actually earn with $10,000 in Varo (with qualifying DD):
Compare this to Pibank's flat 4.60% on $10,000 = $460/year. Or Ally's 3.70% = $370/year.
The takeaway: Varo beats flat-rate accounts only if you keep balances close to $5,000. Above that, the blended rate drops quickly.
Varo Is a Real Bank
Unlike many fintech "banks" that are actually apps sitting on top of partner banks, Varo is a nationally chartered bank regulated by the OCC. This matters because:
- Direct FDIC insurance: Your deposits are insured by Varo Bank directly, not through a partner
- Banking stability: Subject to full bank regulatory oversight
- No middleman: Faster issue resolution without partner bank bureaucracy
Varo was the first consumer fintech to receive a national bank charter (2020), which was a significant regulatory achievement.
Standout Features
Early Direct Deposit
Get your paycheck up to 2 days early. This is increasingly common but still valuable if you're living paycheck to paycheck.
Varo Advance (Fee-Free Overdraft)
Qualify for up to $250 in fee-free overdraft protection. No interest, no fees—just repay with your next deposit. Requirements include regular direct deposits and account history.
55,000+ Fee-Free ATMs
Access to Allpoint and MoneyPass networks. Varo also reimburses up to $15/month in out-of-network ATM fees.
The Mobile-Only Limitation
Varo has no desktop website for banking. Everything happens in the mobile app. For most users, this is fine—the app is well-designed. But if you prefer managing money on a computer, Varo won't work for you.
Who Should Choose Varo?
Varo is ideal for:
- Small emergency fund builders: If you're saving your first $5,000, that 5% is genuinely great
- Regular paycheck receivers: Can easily meet the $1,000/mo DD requirement
- Mobile-first users: Comfortable with app-only banking
- Fee-sensitive savers: The overdraft protection is valuable
Varo is NOT ideal for:
- Large balance savers: The 3% rate above $5K is below market
- Self-employed/retirees: Can't meet direct deposit requirements
- Desktop users: No web banking available
- Joint account needers: Not offered
Varo vs. Competitors
Varo vs. Ally: If you have over $5,000, Ally's flat 3.70% beats Varo's blended rate. Under $5,000 with DD, Varo wins significantly.
Varo vs. SoFi: SoFi's 4.00% (with DD) applies to your entire balance—better for larger savings. Varo's 5% on $5K is better for small savers.
Varo vs. Chime: Both target similar demographics. Varo's 5%/3% beats Chime's 2%/0.5% structure handily.
The Bottom Line
Varo's 5% APY is real, but it's not the universal win it appears to be. It's best suited for savers building their first $5,000 emergency fund while receiving regular paychecks.
If you have more than $5,000 to save—or can't meet direct deposit requirements—a flat-rate account like Ally or Pibank will serve you better in the long run.
Don't chase the headline rate. Choose the account that fits your actual situation.