This Bank Account Pays 5% Interest -- With a Catch

There are a few things you'll need to do to qualify for that impressive APY.

When you're shopping for a new savings account, the annual percentage yield (APY) is usually one of the deciding factors. The higher the APY, the more your savings will grow, so it makes sense to go with the best offer you can find.

Right now, savings accounts rates are up, and there are quite a few offering 1.5% to 2%. But one account offers more than twice as much. The Varo Savings account, offered by online-only Varo Bank, allows you to earn up to 5%. It's an incredible rate, but there are a few strings attached.

How to earn up to 5% interest with Varo Bank

Varo Bank offers a checking account and a savings account, both of which have no monthly fees or minimum balance requirements. You need to open its checking account, called a Varo Bank Account, first. After that, you can also open a Varo Savings account.

The Varo Savings account has two separate APYs. Its standard rate is currently 1.2%, and its elevated rate is 5%. To get the elevated interest rate, you must meet these requirements during the qualifying period:

Our Picks for the Best High-Yield Savings Accounts of 2025

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.70% Rate info 3.70% annual percentage yield as of March 17, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.70% Rate info 3.70% annual percentage yield as of March 17, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
CIT Platinum Savings Member FDIC. APY 4.30% APY for balances of $5,000 or more Rate info 4.30% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000+ for max APY Open Account for CIT Platinum Savings On CIT's Secure Website. Member FDIC.	4.30% APY for balances of $5,000 or more Rate info 4.30% APY for balances of $5,000 or more; otherwise, 0.25% APY	$100 to open account, $5,000+ for max APY	Open Account for CIT Platinum Savings On CIT's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.70% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Feb. 6, 2025. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.70% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Feb. 6, 2025. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.

• Get direct deposits totaling $1,000 or more.
• Have $0 or more in both your Varo Bank Account and Varo Savings account at the end of the qualifying period.
• Make sure your savings account balance isn't higher than $5,000 at the end of each business day.
• Meet the minimum average balance for earning interest.

The minimum average balance to earn interest depends on whether it's a 30-day month or a 31-day month. In both cases, it's very low. The minimum to earn the 5% APY right now is $1.25 in 30-day months and $1.21 in 31-day months.

Overall, it's easy enough to earn the maximum APY. The main things you need are at least $1,000 in direct deposits and to avoid having a balance higher than $5,000.

Eligibility is determined each qualifying period. The qualifying period starts on the first calendar day of the month and lasts through the final business day of the month. Every qualifying period where you complete the requirements, you earn a high APY. When you don't, you earn a lower APY.

Is Varo Bank worth it?

There's a clear tradeoff between a Varo Savings account and other savings account options. You can earn a much higher APY, but only on up to $5,000 in balances. It's also a bit more of a hassle, since you need to make sure your balance never ends the day above $5,000.

If you have up to $5,000 in savings, then a Varo Savings account is an excellent choice. As long as you complete the requirements, you'll earn a very high savings rate.

If you have more than $5,000 in savings, then you might want to consider other top savings accounts first. You could still use a Varo Savings account for $5,000 to earn the highest possible interest rate, while keeping the rest of your money elsewhere. But for those with a large amount of savings, this could be more trouble than it's worth.