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Varo Savings Account Review: High APY for Savings Below $5K

Review Updated
Kevin Payne
Steven Porrello
By: Kevin Payne and Steven Porrello

Our Banking Experts

Eric McWhinnie
Check IconFact Checked Eric McWhinnie
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

The Varo Savings account offers one of the highest APYs we've found, with no account fees or balance minimums. However, the stellar APY only applies if you have less than $5,000 in savings and can qualify for the account's highest APY tier. Read our in-depth Varo Savings account review to learn more about the account and whether it is right for you.

Ratings Methodology
Rates as of May 17, 2024

Varo Savings

Member FDIC.
Rating image, 3.00 out of 5 stars.
3.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 3.00 out of 5 stars.
3.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
APY
Up to 5.00% Rate info Circle with letter I in it. Start earning 3.00% Savings APY, then qualify to earn 5.00% APY on your balance up to $5,000.00 for the following month by meeting these two requirements in the current month: 1) Receive qualifying direct deposit(s) totaling $1,000 or more; and 2) End the month with a positive balance in both your Varo Bank Account and Savings Account. You’ll continue to earn 3.00% APY on any additional balance above $5,000.00.
Min. To Earn APY
N/A
  • High savings account APY 
  • No monthly fees
  • Multiple deposit options
  • FDIC insurance 
  • Automatic savings tools
  • No single account option

Compare savings rates

Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.

Account APY Promotion Next Steps
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn: $0
New customers can earn up to a $300 bonus with qualifying direct deposits!
5.00% APY for balances of $5,000 or more
Rate info Circle with letter I in it. 5.00% APY for balances of $5,000 or more; otherwise, 0.25% APY
Min. to earn: $100 to open account, $5,000 for max APY
N/A
5.25%
Rate info Circle with letter I in it. To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.
Min. to earn: $0
N/A

Varo Savings interest rate

Account APY Minimum Deposit
Varo Savings Up to 5.00% $0
Data source: Varo.

The APY at Varo is tiered -- you'll earn a very competitive rate on your first $5,000 if you meet the requirements (more on those below). But the APY on balances above $5,000 isn't anything to write home about. If you've got a lot of cash saved, look to other banks for a better deal.

Full Varo Savings account review

There are many reasons to love the Varo Savings account, but it's not for everyone. Here are the reasons you might want to open a Varo Savings account -- and some reasons it might not be the best fit.

Top perks

Up to 5.00% APY: A savings account with Varo comes with two interest tiers. You'll earn the max APY on the first $5,000 in your account when qualifying conditions are met, then a lower APY on every dollar above that. If conditions aren't met, you'll earn the lower APY regardless of how much you've saved. As far as what those conditions are, you have to satisfy two things:

  • You need to have at least $1,000 in direct deposits each month.
  • Your balance must be equal to or above $0 at the end of each month.

No fees or balance requirements: The Varo Savings account has no monthly maintenance fees, overdraft fees, or minimum balance requirements.

Automated savings: Varo offers two tools to automate your savings:

  • Save Your Pay allows you to automatically transfer a percentage of your Varo Bank account direct deposits to savings.
  • Save Your Change rounds all your transactions up to the next dollar and transfers the change to your savings account.

FDIC insured: Just like a traditional bank, Varo includes FDIC insurance. Your funds are protected, up to $250,000 per depositor, per institution.

What could be improved

No single account option: You can't open just a savings account. You must first open a Varo Bank account, then pair it with a Varo Savings account.

Low APY for balances above $5,000: The lower APY earned on deposits above $5,000 is nothing to write home about. If you have a large amount of savings, you'll likely earn more by depositing it in one of today's top-paying savings accounts.

How to access your money

Varo doesn't have physical branch locations, but it still gives you options for depositing and withdrawing funds online.

Deposit options

You can deposit money to your Varo Savings account using one of these methods:

  • Mobile transfer
  • Online transfer
  • Mobile check deposit
  • Direct deposit
  • In person at Green Dot Network locations

Withdrawal options

Withdrawal options for your Varo Savings account include:

  • Mobile transfer
  • Online transfer

If you want to withdraw cash from your Varo Savings account, you'll first need to transfer the funds to an external bank account or your Varo Bank account. Then you can withdraw cash at an ATM or bank branch.

The Varo Savings account is right for you if:

You have $5,000 in savings and want to avoid account fees and minimum balance requirements. It's also great if you're trying to get in the habit of saving money, as Varo offers numerous tools and ways to save a little extra each month.

If Varo isn't right for you, check out our full list of the Best High-Yield Savings Accounts.

Keep reading about Varo

Our savings account methodology

At The Motley Fool Ascent, we rate savings accounts on a five-star scale (1 = poor, 5 = best). We evaluate all savings accounts across four main criteria: annual percentage yield (APY), brand and reputation, fees and minimum requirements, and perks that really make a difference -- think ATM access, linked checking accounts, or even branch access.

Our scores are weighted as:

  • APY: 50%
  • Brand and reputation: 20%
  • Fees and minimums: 15%
  • Other perks: 15%

Learn more about how The Motley Fool Ascent rates bank accounts.

FAQs

  • That depends on how much you plan to keep in your account. The Varo Savings APY is competitive for the first $5,000 you have deposited. Beyond that amount, the APY falls well below what other savings accounts are offering now.

  • Yes, Varo Bank is a legitimate FDIC-insured, online bank. Deposits at Varo Bank are insured up to $250,000 per depositor.

Our Banking Experts