About Varo Money

By J.R. Duren
HighYa Staff Updated on: Apr 12, 2018

Varo Money is an iOS-based banking app that provides full-service banking products and tools to help you cultivate a healthy financial life.

The company was founded in Nov. 2015 by four entrepreneurs: Assaf Guery, Colin Walsh, Mykola Klymenko and Roger Van Duinen. Walsh is the company’s CEO. He is a Cornell grad with an extensive background in fintech and payment processing.

According to their website, Varo’s purpose is to, "This combination of integrated financial solutions and proprietary technology makes us the first entrant to truly challenge the existing banking model. We’re bringing relationships back to banking for everyone."

Our question is: Does Varo accomplish what it’s setting out to do? Is it really challenging the existing traditional banks with customer-friendly accounts? What does it offer and what does it do?

To answer that question, we researched what the company offers through their app, how it works and any rates and fees you should know about.

What Does the Varo Banking App Offer?

Varo’s services can be divided up into five different features: checking, savings, early direct deposit, lines of credit, personal loans and various money-management tools.

Varo Checking

The checking account you get with Varo is pretty much the core account of all your banking with them.

While you aren’t going to use a physical checkbook, you get the typical running ledger of transactions, you can make deposits to and withdrawals from the account and it serves as your money workhorse.

Checks are deposited through the app; there’s no need for a branch and you can use your Varo banking account to pay bills.

You also get a Varo Visa debit card to use when you shop. What makes this card unique compared to traditional banks is that you get zero-liability. What that means is that you aren’t responsible for any fraudulent purchases made to your Varo account.

Normally, you’re liable for $50 of fraudulent purchases if you report those purchases in two days or less. However, if you report the shady charges more than two days after they happen, you’re liable for up to $500 of the charges.

Varo says in their fine print that you get zero liability if you report the fraud "immediately", which, in our opinion, means within two days, based on the regulations laid out in the Electronic Funds Transfer Act. We contacted Varo to clarify this but did not hear from them before publishing.

Things You Should Know About the Varo Checking Account

We did a quick read through of some of the fine print on Varo’s site and found some information about ACH transfers (one bank to another) that you should know.

First, if your account is less than 30 days old, you’re only allowed to transfer in up to $100 at a time and up to $100 per day. You can’t transfer more than $200 in any seven-day period.

The max you can transfer in a month is $500.

Once your account is open for at least 30 days, those daily limits go up to $200, the seven-day limit is $400 and the monthly limit is $700.

You’ll only be allowed to withdraw $300 cash per day from an ATM or point-of-sale and the most you can spend with your card in a day is $2,500.

Varo Savings

Your Varo savings account works the same way a traditional bank’s savings account works. You can send money from your checking account into the savings account.

The difference between your Varo account and brick-and-mortar accounts is that you’ll earn interest on your balance. The bank pays you an annual interest rate of 1.25%. It may not sound like a lot, but it’s more than what you’ll get from a traditional bank like Chase or Bank of America.

While Varo likes to say that their savings account earns 25 times more than a traditional bank’s rate of 0.02%, it’s important to know that there are online banks and savings accounts that offer higher interest rates. Here’s a table that includes traditional banks and online-based savings accounts we’ve reviewed:

Bank Interest Rate
Varo Money 1.25%
Ally 1.25%
SmartyPig 1.15%
Varo Money 0.05%
Bank of America 0.03%
Chase 0.01%
HSBC 0.01%
Wells Fargo 0.01%

As you can see, Varo’s rates are as good or better than all the savings accounts we listed.

Varo Early Direct Deposit

Direct deposit is a popular way to get your paychecks from work. In fact, a little over a year ago the National Automated Clearing House Association said that 82% of American workers get their paychecks via direct deposit.

With Varo, you can get your paycheck up to two days early, they claim, because of their process. Your employer notifies the Federal Reserve that you’re getting paid and the total that you’ll receive. The Fed tells Varo you’ve got money coming and the money is sent to your account.

Varo says this process means that you can get your money two days earlier than normal. In other words, if everyone is getting paid on Friday, you might be able to get your money on Wednesday.

Varo Lines of Credit and Personal Loans

One of the things that makes Varo Money very similar to a bank is that they can offer you lines of credit and loans in addition to checking and savings accounts.

Their lines of credit work like credit cards. They approve you for a certain amount of money and you can withdraw from that approved amount whenever you want. If you leave the money and don’t touch it, it won’t cost you anything.

However, the moment you withdraw some of it, interest kicks in. Their basic terms are lines of credit from $1,000 to $5,000 at interest rates of 13.75%-23.75%. If you want to withdraw that money as cash, then you won’t be charged any extra like you would if you took a cash advance on a credit card.

Based on our research of dozens of credit cards, we think Varo’s APR range is competitive compared to credit cards.

However, it doesn’t quite match up with the Discover it’s low-end APR of 12.24%. Another advantage to using a credit card as a line of credit is that, like in the case of the Discover it, you can earn 1% cash back on the purchases you make.

That rewards rate – with some cards it can get as high as 2% and beyond – is better than the 0.50% interest you get through a VARO savings account.

Varo’s personal loans have repayment periods of three to five years but their site doesn’t reveal the APR of those loans or the average amount they disburse.

At the time of publishing, Varo was able to lend in 17 states.

Varo Money Management

Varo’s money management tools pair up with your accounts to provide some basic analysis of your financial situation.

For example, in your checking account they show you your anticipated spending and bills for the month, then show you how much you can spend each day in order to come in under budget.

In your savings account, you have the ability to set savings goals and spending goals to help you manage your money wisely.

Varo Money’s Rates and Fees

The bank works off the popular no-fee philosophy, in which you won’t pay any fees for ATM withdrawals form Allpoint ATM’s, overdraft fees, foreign transaction fees or fees for not having a minimum balance.

You will pay fees for their lending products. Exactly how much you’ll pay depends on which state you’re in. The company’s Policies page provides links to documents that tell you how much those fees are.

Public Opinion About Varo Money

The app has more than 2,000 reviews in the iTunes store; its average rating is 4.7 stars. Recent reviews of the app indicate that you’ll most likely enjoy your user experience.

Earlier reviews of the app included complaints about ATM fees and some issues with limits on how much you can direct deposit.

As for the ATM fees, Varo says you won’t be charged if you use Allpoint ATM’s, of which there are more than 50,000 across the U.S. There will be fees if you go out of network to a place like Chase or Bank of America.

Regarding the direct deposit complaint, we found nothing in Varo’s fine print that says there are dollar limits on direct deposit. We also didn’t find anything indicating that a direct deposit could be split up into two separate withdrawals.

Our Final Thoughts About Varo Money

Over the past couple of years, dozens of online banks and lending services have popped up claiming to offer a better experience than what you’d get from your traditional bank.

Based on public opinion about the app, it seems like users are happy with Varo.

We’d say the app’s strength is that you can pretty much use it to do anything you’d do at a traditional bank, including getting lines of credit and loans. Also, the interest rate for a savings account has a generous interest rate that puts Varo above traditional banks like Bank of America and Chase.

As for drawbacks, the daily deposit and withdrawal limits are cumbersome. Also, if there aren’t a lot of Allpoint ATM’s in your area, that could be a point of annoyance over time.

We believe this app is best suited for someone who makes regular direct deposits via their job and doesn’t mind that their bank has no physical location.

If you aren’t fully convinced Varo is the right fit for you, don’t worry; you have multiple app-based banking options. A few of the ones we’ve reviewed using the format you read here are Chime and Simple.

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8 Consumer Reviews for Varo Money

Average Consumer Rating: 1.5
Rating Snapshot:
5 star: 1 4 star: 0 3 star: 0 2 star: 0 1 star:  7
Bottom Line: 13% would recommend it to a friend
Showing 1-8 of 8
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  • 2 out 2 people found this review helpful

    Closed account

    • Raleigh, NC,
    • Apr 19, 2018
    • Verified Reviewer

    My name is Tee and I opened an account with Varo around December of 2017. I started to get direct deposit from my job and Social Security in January 2018. So from January until April, my job checks and SS was being deposited in my account. Even my IRS tax return was deposited. So, like a week ago, SS deposited a lump sum in my account, from four years of retroactive payments.

    Varo immediately froze my account (on a Thursday evening). It has been a week and a day, and I haven’t had any access to any of my money. My work check, tax return and my daughter SSI check are on hold. I called repeatedly and emailed, and they told me to send over my ID, social security card and proof of residency. I did just that. They closed my account. How is SS money fraudulent when all you had to do is call and verify funds?

    So, they sent my lump sum back to Social Security, closed my account and still haven’t sent my remaining money to me, which they claimed in a check. They have no direct phone number to call them, just by email. They ignored all my emails. They have over $3600 of my money and won't return it. I have kids and bills and had to borrow money (which I never do) to get by. I had to switch banks, change all my direct deposits. So aggravated. I still haven’t received my lump sum money because it’s a process when you change accounts.

    Please DON'T use this bank! They will close your account and they don’t have to give you a good reason why. I guess black people can't have money. Well, I work hard, and I should be treated as such.

    Bottom Line: No, I would not recommend this to a friend

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    • Apr 23, 2018

      Felicia

      It's interesting to note that your review is the only one they've failed to respond to, so I guess there's some validity to your claim. Thank you for the forewarning, and I hope you get your money back.

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  • 1 out 1 people found this review helpful

    Worst bank ever

    • New Braunfels, TX,
    • Apr 16, 2018
    • Verified Reviewer

    I took a chance and opened an account with this so-called bank. They have the worst customer service I have ever experienced. They give their phone agents very little information about accounts, and then they tell you if you want a further explanation to email them and they can clarify. I asked numerous times why I wasn’t able to access the funds that I deposited and all they kept repeating was to email us and we can try to assist you. Very unprofessional, and here I sit with no access to my money.

    Bottom Line: No, I would not recommend this to a friend

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    • Apr 16, 2018

      Aaron Valentine,

      Hi Kevin, I'm sorry to hear about your experience. We work with various partners to verify your identity and protect against fraud and identity theft. We try very hard to stop all the bad guys while accepting all the well-intentioned customers, but sometimes our analysis misses the mark. We work to refine the analysis to get better over time. We appreciate your interest in Varo and wish you the best of luck going forward.

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  • 1 out 1 people found this review helpful

    Horrible experience

    This company is a scam. They closed my account without giving me a good excuse. When I asked why I didn't get a straight response. They closed my account because I either withdrew money from my account or because I had my mom deposit money, but either way, I'm getting a lawyer and suing for false advertising.

    Bottom Line: No, I would not recommend this to a friend

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    • Apr 16, 2018

      Aaron Valentine,

      Hi Diane, I'm sorry to hear about your experience. We work hard to protect against fraud and identity theft. We try very hard to stop all the bad guys while accepting all the well-intentioned customers, but sometimes our analysis misses the mark. We work to refine the analysis to get better over time. We appreciate your interest in Varo and wish you the best of luck going forward.

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  • No complaints!

    • Arkansas,
    • Mar 29, 2018
    • Verified Reviewer

    I signed up for an account last month and received my card on time, as promised! I've used my card before receiving my direct deposit today from the VA. I transferred funds to my Varo account from an external account to test it out and experienced no fees, and the transfer was quick.

    I don't call my bank for regular things. If I ever need to call a bank it will be for something major, but using the contact option in the app I have received very fast responses, and the customer service seems to be very quick.

    Varo rate has gone up this month to 1.25% if I'm not mistaken, but either way, I am happy with the account and will continue to use it as I need to.

    Bottom Line: Yes, I would recommend this to a friend

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    • Apr 16, 2018

      Aaron Valentine,

      Hi Lenet, thanks for your review! We've worked hard to create the best banking experience possible, without the fees you find at the big banks. We also just increased the APY on our savings accounts to 1.5%. We want our customers to save more money instead of paying fees to the big banks. We appreciate your review! Let us know if you need anything by reaching out to us at help@varomoney.com.

    • Apr 17, 2018

      Lenet

      Absolutely! I love my account and wanted to let people know.

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  • 3 out 5 people found this review helpful

    Varo scam

    • Chicago, IL,
    • Mar 18, 2018
    • Verified Reviewer

    My experience Varo has been horrific. I am not one to leave reviews beyond a rating, especially negative ones, however, I feel obligated to so in this case.

    I set up my Varo account almost a month ago and still do not have a debit card or access to my funds.

    Varo does not allow outgoing transfers of your money, so if you are displeased or wish to transfer money to another bank account for whatever reason, you are stuck.

    I have wasted countless hours online and on the phone, and while the customer service reps are friendly, there seems to be little they can do.

    My original debit card never arrived. When I reported this to Varo, I was assured my replacement card would be express shipped and arrive in a few days. When it had not arrived the next week, I again contacted Varo and was informed that it had only been shipped a day before and would arrive in 7 to 10 business days. When I asked again about why a bank would not “be set up for outgoing transfers” I was informed that this was “a feature they were working on and hoped to be able to offer in the future.”

    Please proceed with caution before depositing any money or using the Varo app. Do your research and read reviews.

    Bottom Line: No, I would not recommend this to a friend

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    • Apr 7, 2018

      Diane Whitaker

      No, I wouldn't refer a friend to Varo Bank either because not only do they have very poor customer service, the employees are rude and they close your account without any notice. When I asked why they closed my account, they didn't give me a straight answer. I asked if it was because I had my mom deposit money into my account or that I withdrew money from my account I didn't get a response. So I advise everyone not to use Varo bank, they are definitely a scam. I'm getting an attorney and they will be sued for false advertising.

    • Apr 16, 2018

      Aaron Valentine,

      Hi Dan, I'm sorry to hear about your experience. Upon account approval, we immediately send out a debit card to all our account holders. We send cards out via USPS first class mail, which can take 7-10 business days to arrive. Unfortunately, there are rare cases when cards get lost in the mail or are inadvertently discarded. We don't charge card replacement fees, and we'll do everything we can to get you a new card shipped out. Please feel free to reach out to us at help@varomoney.com, and we'd love to get this resolved for you.

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  • 6 out 7 people found this review helpful

    Worst bank ever! Don't waste your time!

    First let me say, this bank has put me through depression. I signed up for this bank in September 2017. I never received my card. I wanted to start using this bank just because I like the fact that I get paid two days sooner.

    I called a representative and had them express ship a card out to me. The woman had my address completely wrong, and I never received it. After arguments back and forth with this bank, they finally gave me a tracking number at the last minute. The weather was really bad and UPS couldn’t assist me at all the day I asked to pick it up (which was the last day before the shipped it back), They closed early due to the snow, and my card was shipped back to its sender.

    After more emails and calls cursing everyone out, a nice gentlemen (who sounded very sympathetic) tried to MoneyGram my money to me. I went to my nearest MoneyGram to pick it up and unfortunately, I couldn’t because Varo is not considered a tradition bank. I’m angry again. After more emails and calls of me cursing people out they tried another alternative, which was to transfer my money into PayPal (the only place where it would work). Of course, that didn’t work.

    Now my $1,500+ is still in this Varo account, and I have no access to it. My birthday is coming up in a few days, and my direct deposit goes to this account, so I’m just out of luck all over the board. There's no way to transfer your money out, they are non-compliant, and just overall sucks. It’s not the representatives, it’s the owner who doesn’t know the qualities traditional banks have, which is being able to transfer funds, working with you to get your money.

    I am fed up with this bank. I will consider using Chime. They are pretty good and send your card out right away, and get your address right the first time. I can go on and on about this crappy bank, but my fingers are just as tired as my brain from dealing with this bank. It’s horrible and I am overly angry.

    Bottom Line: No, I would not recommend this to a friend

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    • Apr 16, 2018

      Aaron Valentine,

      Hi Mira, I'm sorry to hear about your experience. Upon account approval, we immediately send out a debit card to all our account holders. We send cards out via USPS first class mail, which can take 7-10 business days to arrive. Unfortunately, there are rare cases when weather delays shipments, cards get lost in the mail, or cards are inadvertently discarded. We don't charge card replacement fees, and we'll do everything we can to get you a new card shipped out. I see you have since received and used your Varo Visa Debit Card. Please feel free to reach out to us at help@varomoney.com if you experience any other issues.

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  • 3 out 3 people found this review helpful

    Inept customer service and lies

    • Fredericksburg, VA,
    • Mar 9, 2018
    • Verified Reviewer

    They told me I could transfer money between accounts and I can’t. They failed to get my debit card to me three times while promising me it would be here. Right now I don’t have access to my money, and they keep lying to me. I can’t pay my bills without the debit card. Do not use this bank.

    Bottom Line: No, I would not recommend this to a friend

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    • Apr 16, 2018

      Aaron Valentine,

      Hi Nikki, I'm sorry to hear about your experience. Upon account approval, we immediately send out a debit card to all our account holders. We send cards out via USPS first class mail, which can take 7-10 business days to arrive. Unfortunately, there are rare cases when cards get lost in the mail or are inadvertently discarded. We don't charge card replacement fees, and we'll do everything we can to get you a new card shipped out. I happy to see your replacement card was received and activated. Thanks for your feedback, and please let us know if you encounter any other issues by sending an email to help@varomoney.com.

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  • 7 out 12 people found this review helpful

    It’s a clever scam!

    I opened an account with the Varo app. It’s been almost a month now and they never send me a bank card. Each time that I called they give me another date when the card would arrive. I’m still waiting! It’s a clever scam.

    Bottom Line: No, I would not recommend this to a friend

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    • Apr 16, 2018

      Aaron Valentine,

      Hi Frantz, I'm sorry to hear about your experience. Upon account approval, we immediately send out a debit card to all our account holders. We send cards out via USPS first class mail, which can take 7-10 business days to arrive. Unfortunately, there are rare cases when cards get lost in the mail or are inadvertently discarded. We don't charge card replacement fees, and we'll do everything we can to get you a new card shipped out. I'm happy to see that your replacement card was received and activated. If you encounter any other issues, please feel free to contact us by sending an email to help@varomoney.com.

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