Varo is a mobile-first bank with no physical branches

Varo Bank is a federally chartered bank that operates entirely through a mobile app and website — there are no branch offices to walk into. You open an account, deposit money, send transfers, and manage your finances all on your phone or computer. The bank is owned by Varo Inc., a fintech company founded in 2013, and holds a banking charter from the Office of the Comptroller of the Currency (OCC), which means it is a real bank, not just a payment app sitting on top of someone else's bank.

Varo's main product is a checking account that comes with a debit card. The account earns interest on your balance — the rate varies and changes over time, but Varo advertises it as competitive with other online banks. There are no monthly fees, no minimum balance requirement, and no overdraft fees. You can deposit checks by taking a photo with the app, and you can withdraw cash at ATMs that belong to the Allpoint network, which includes over 55,000 machines worldwide.

The bank is FDIC insured, meaning deposits up to $250,000 per account holder are protected if the bank fails. This is the same protection you get at any traditional bank.

Key Takeaways

  • Varo is a federally chartered bank licensed by the OCC, not a third-party app or payment service.
  • All banking happens through the Varo mobile app or website — there are no physical branches.
  • Accounts earn interest, have no monthly fees, and come with a debit card and access to 55,000+ ATMs through Allpoint.
  • Your deposits are FDIC insured up to $250,000, the same protection as traditional banks.
  • Varo makes money from interchange fees on debit card transactions and from other financial products, not from account fees.

How Varo makes money without charging account fees

Varo does not charge monthly maintenance fees, overdraft fees, or minimum balance fees. Instead, it makes money the way most banks do: through interchange fees — a small percentage of every debit card transaction that merchants pay to the card network and the bank. When you swipe your Varo card at a store, Varo receives a cut of that fee.

Varo also offers optional add-on products like savings pods (separate savings buckets within your account), early direct deposit (getting your paycheck up to two days early), and cash advances. These services generate additional revenue. The bank's business model depends on having enough customers using the debit card regularly, which is why the account itself is free — the goal is to get you to use the card and keep your money there.

What you can and cannot do with a Varo account

A Varo checking account works like a traditional checking account for most everyday purposes. You can receive direct deposits, send money to other people via ACH transfer or Varo-to-Varo transfers, pay bills online, and use your debit card to buy things or withdraw cash. The app shows your balance in real time and lets you freeze or unfreeze your card if it is lost or you suspect fraud.

What you cannot do is write paper checks. Varo does not issue checkbooks. If you need to pay someone by check, you would have to transfer money to another account or use a third-party service. You also cannot deposit cash directly — you can only deposit checks by photo or receive money via transfer. If you need to deposit physical cash regularly, Varo is not the right fit.

Varo does not offer credit products like credit cards or personal loans through the bank itself, though the company has offered loans through partner lenders in the past. The account is checking only — there is no savings account product separate from the checking account, though you can create savings pods within the checking account to set money aside.

How Varo's interest rate works

Varo advertises that checking accounts earn interest, which is unusual for checking accounts at traditional banks. The rate is variable, meaning it changes based on market conditions and Varo's own decisions. The bank publishes the current rate on its website and in the app. Unlike a savings account at a traditional bank, the interest is paid on your entire checking balance, not a separate savings product.

The rate Varo offers is typically higher than the near-zero rates at big banks, but it fluctuates. You should check the current rate before opening an account if interest earnings matter to you. The interest is compounded daily and deposited monthly, so you earn interest on your interest as well.

Varo's relationship to other financial institutions

Varo is its own bank — it holds the charter and the deposits. However, it partners with other companies for specific services. For ATM access, Varo uses the Allpoint network rather than maintaining its own ATMs. For bill pay and some transfer services, it may use third-party processors. But the account itself, the deposit insurance, and the banking relationship are all with Varo Bank.

Varo is not owned by or affiliated with any of the major traditional banks. It is a separate company that competes with both traditional banks and other online-only banks like Chime, Ally, and Charles Schwab Bank. Each of these banks operates independently and offers different features and fee structures.

Who should consider opening a Varo account

Varo works well for people who are comfortable banking entirely on their phone, do not need to deposit cash regularly, and want to avoid monthly fees. It is a good fit if you receive direct deposit (which unlocks the early deposit feature), use a debit card for most purchases, and want your checking balance to earn some interest.

Varo is less suitable if you need to write checks frequently, deposit cash regularly, want access to a physical branch for in-person help, or need a wide range of banking products like savings accounts, credit cards, or loans. In those cases, a traditional bank or a different online bank might serve you better.

Security and customer support at Varo

Varo uses standard banking security: encryption for data in transit, multi-factor authentication for login, and fraud monitoring on transactions. If your card is lost or stolen, you can freeze it when ready in the app. If unauthorized charges appear, you can report them through the app, and Varo has a dispute process similar to other banks.

Customer support is available through the app and through email or phone. Because there are no branches, all support is remote. Response times vary, but Varo publishes a support number and email address in the app. For urgent issues like a lost card or suspected fraud, you can usually reach someone quickly.

Frequently Asked Questions

Is Varo a real bank or just an app?

Varo is a real bank. It holds a federal charter from the Office of the Comptroller of the Currency and is FDIC insured. It is not a payment app or a fintech service sitting on top of another bank — it is the actual bank holding your deposits.

Can I deposit cash into a Varo account?

No. Varo does not accept cash deposits. You can deposit checks by taking a photo with the app, or receive money via direct deposit or transfer. If you need to deposit cash regularly, you would need a different bank or a way to convert cash to a check or transfer first.

What happens to my money if Varo goes out of business?

Your deposits are protected by FDIC insurance up to $250,000 per account holder. If Varo fails, the FDIC would transfer your account to another bank or reimburse you directly. This is the same protection you have at any traditional bank.

Can I write checks with a Varo account?

No. Varo does not issue checkbooks. If you need to pay by check, you would have to transfer money to another account or use a third-party check service. Most Varo customers use the debit card or online bill pay instead.

How much interest does Varo pay on checking accounts?

The rate varies and changes over time. Varo publishes the current rate on its website and in the app. It is typically higher than rates at traditional banks but lower than some high-yield savings accounts. Check the current rate before opening an account if interest earnings are important to you.