Varo Money Savings Account – 5% APY

Update 3/1/22: On April 1, 2022, the savings rate will increase from 3% APY to 5% APY. Qualifications to be eligible for the rate remain the same. (ht Davis)

Update 10/10/21: Starting October 1, 2021, standard savings rate will increase to 0.50% APY, up from 0.20% APY.

Update 6/1/21: Starting 7/1, you will no longer need 5 debit transactions to get 3% APY. Must also keep a balance of $5,000 or less. Hat tip to reader Davis

Offer at a glance

  • Interest Rate: 3% APY
  • Minimum Balance: $0.01
  • Maximum Balance: $5,000
  • Availability: Nationwide
  • Direct deposit required: Yes, $1,000+
  • Additional requirements: 5 debit card purchases
  • Hard/soft pull: Soft pull
  • ChexSystems:  No
  • Credit card funding: Unknown
  • Monthly fees: None
  • Insured: FDIC

The Offer

Direct link to offer

  • Varo Money is now offering a tiered savings account:
    • Account earns 0.2% APY as long as the balance is $0.01 or more
    • Account earns 3% on balances up to $5,000 if the following requirements are met:
      • Receive payroll or government direct deposits totaling at least $1,000 each month into the Varo Bank Account
      • Use the Varo Visa® Debit Card to authorize at least 5 purchases each month (excluding ATM or Over-the-Counter Cash Withdrawals and P2P transfers)

Avoiding Fees

This account has no monthly fees to worry about.

Our Verdict

A lot of people have Varo Money accounts from the $100 sign up bonus they previously offered. I don’t think this savings account is particularly useful, other accounts earn at a rate of 2.5% APY with no requirements (beating out the 2.12% APY offered here) and HeritageBank offers 3.33% APY with similar requirements (direct deposit not required, any ACH will work). I hope Varo Money offers another referral bonus again soon.

Hat tip to reader Francesco

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Sheri
Sheri

I received 5% using Discover ACH credits.

Yep
Yep

Really folks this account is not worth the time. expected interest to be paid on the 1st like last month – and because the 1st is a business day next month. had a busy day and didn’t check this account yesterday

now they will deny 5% for the entire month of August. and they didn’t pay it in July either.

I would warn people away from this account. Is it really worth this much headache for a few extra dollars when many bank are now offering higher rates each week. going to transfer it via CIBC to Brio and be done with this scammy bank

Kaching
Kaching

I set up my Evansville Teachers FCU to automatically do an ACH pull in the amount of $21.00 from my Varo Savings account on the 25th of every month to make room for the incoming interest. So far, I have not missed any of my 5% APY interest credits.

Once the interest is posted to my Varo Savings account I will, at my leisure, top it off with a few cents from my Varo Bank account so that it is back to an even $5000. This part, of course, is optional.

Yep
Yep

yea that’ll probably work. but now that I’ve learned no matter what I do, I won’t get the higher interest because of their silly little game, I don’t see myself transferring it back in. Brio is already at 2.15% without having to waste bandwidth on technicalities.

I’d be willing to keep up with the DD. every sane bank doesn’t give you 5% above a certain max balance – okay fine. to forfeit an entire month’s interest over one day above $5000?

SCAMMY. transferring out and probably not returning

GabiG
GabiG

Is the most optimal time to do a direct deposit for Varo on the 1st of the month? It seems like until you do a $1000 direct deposit, your interest rate for that month will be their standard 1.2%. Since the reset happens at the end of the month, regardless of when you did your direct dep, it seems more optimal to do a DD at the 1st so you have a full 30 days earning at 5%

Darlene
Darlene

GabiG I was wondering this since I’m new to this account.. is it true that your rate is 1.2% each month until you get that “DD?” and it always resets on the 1st of the month each month? This is my second month with this account so I’m curious

Kaching
Kaching

The rate does reset at the 1st of every month to 1.2%. However, as long as you get that DD in by the end of the month, you will be awarded the 5% APY rate for the entire month. It does not matter what day of the month you send that DD.

That’s what it says on one of the articles on their site:
https://support.varomoney.com/hc/en-us/articles/360022551031-How-do-I-Earn-the-Higher-Interest-Rate-or-Annual-Percentage-Yield-APY-on-my-Varo-Savings-Account-

“When you qualify for 5.00% APY, you will earn the higher rate for that entire calendar month as long as you continue to meet the requirements through the end of the Qualifying Period. Otherwise, your APY will be 1.20% for the entire month. We’ll let you know if your rate changes.”

It’s worded even more clearly on the fine print of their savings account agreement:
https://www.varomoney.com/wp-content/uploads/2022/02/Varo-Bank-Savings-Account-Agreement-4_1_2022-1.pdf

“If you have met all of the Elevated Savings Conditions at the end of the current Qualifying Period, your interest will be recalculated and you will earn at the Elevated Interest Rate for the entire calendar month.”

Kaching
Kaching

Actually, you have to get that DD in by the last business day of the month.

Yep
Yep

It’s not true that you’ll get the rate by just doing the DD.

If they decide to pay the interest a day earlier than you thought, and you don’t transfer it out IMMEDIATELY, they forfeit an entire month of interest.

btw William Charles Chuck – is “Kaching” astroturfing for Varo? not sure just checking

Zindella
Zindella

Incredible. What do you think “astroturfing” means?

Yep
Yep

astroturfing: it looks green but it’s not real. nor comfortable to sit on

We always do the math of extra interest earned versus effort and frustration. The extra $11 bucks a month isn’t worth it if it’s a hassle. and if even a few months of interest are lost to technicalities, one would be better off in a no games no nonsense account like Brio

ABC
ABC

Savings account total is $5000 less
But how much total can fund in checking account?
Both accounts all get 5% APY?

Thanks!

sg77

The checking account doesn’t earn interest.

ABC
ABC

Thanks! Sg77.

So, only need open savings account.

sg77

I don’t think it’s possible to just open a savings account. You sign up for the checking account and then optionally add the savings account. And the checking account is useful for receiving the monthly $1000 direct deposit, to avoid going above $5000 in the savings account (though I guess another approach would be to make sure you have less than $4000 in the savings before the DD).

ABC
ABC

sg 77, thanks again. i am new to start doing bank bonus.

I understand that open both checking account and savings account. and checking account to receive $1000 DD from Astra monthly and keep savings account $5000 always. right?

Harry
Harry

I tried Astra transfer. The money was delivered on Monday. I got the email for 5% on Wednesday.

Derek Jang
Derek Jang

The Varo transfer has processed, just waiting on the interest rate bump.

Just to confirm, it is ok to initiate the Astra transfer to the “Varo Bank Account” account number?

I know there are two separate account numbers, Varo bank account and Varo savings account.

Didn’t know if it mattered which Varo account you initiated the Astra transfer to.

Thanks

Kaching
Kaching

It does matter and, yes, you do have it right. You want the money to go to your Varo Bank account (the checking account), rather than the savings account, although it’s the savings account that will turn into the 5% APY.

ShawntheShawn

Actually, the direct deposit can go to either the Bank Account or the Savings Account. Per the Savings Account agreement (https://www.varomoney.com/wp-content/uploads/2022/02/Varo-Bank-Savings-Account-Agreement-4_1_2022-1.pdf), “Your Bank Account and/or Savings Account must receive at least $1,000.00 in Qualifying Direct Deposits.” However, since the Savings Account cannot exceed $5000, it is much easier to manage if the direct deposit goes to the Bank Account. Kaching Derek Jang

Kaching
Kaching

You are quite right. Thanks for the correction.

Darlene
Darlene

We only need 1 time “direct deposit” for the 5%? or the “DD” must be done every month to get the 5%? Anyone know?

Kaching
Kaching

It has to be done every month.

Derek Jang
Derek Jang

Has anyone tried AMEX business checking for the Varo direct deposit requirement?

I see that Astra works, but I haven’t been able to figure out how to signup.

Kaching
Kaching

Varo is very strict as to what it will consider a direct deposit. I’ve tried Goldman Sachs, Barclays, Chase, Fidelity, Wells Fargo, HMBradley, Elements, Apartments (rental income), and Redweek. None of those worked for me. I understand that Treasury Direct, Ally, Alliant, First Tech, Discover, PMCU, and Cash App also do not work.

I believe we have DP’s of only Astra and Wise working.

Derek Jang
Derek Jang

Thanks for the confirmation. I will start messing around with my Astra app again to see if I can get the 1k transfer to process.

Wolf
Wolf

I think they are aware of and read this website. All of social media too. I once asked them to close my account and they ignored it for weeks until I shared a referral on social media suddenly they found the time to close it.

YarnDruid
YarnDruid

Have been working on defining Astra routines to automatically keep the Varo Savings account at no more than $5000. I’m close, but one crucial step does not seem possible with Astra routines as they currently exist. Here is what I have come up with so far, in case you would like to give this a try yourself.

1. Routine Name: VaroSv $22 to VaroCk
Status: Active, Recurring
Notes: Some of my interest payments have posted on the last day of the month, and some on the 1st, so I’m removing 32 days’ worth of interest (rounded up) to leave room in [Varo Savings] near the end of the month.

“Starting on June 29, 2022,
every Month on the 29th,
transfer $22.00
from [Varo Savings]
to [Varo Checking]”

2. (Here’s where I would like to figure out how to create an Astra routine to run on the 2nd of each month to top off [Varo Savings] at $5K by transferring the exact amount needed from [Varo Checking]. Currently, I have to do this by hand once I get notified that the interest posted.)

3. Routine Name: VaroCk Sweep Out >$100
Status: Active, Sweep
Notes: My [Varo Checking] has a $100 baseline balance because Astra requires that minimum in sweep-from accounts.

“Starting on July 3, 2022,
every Month on the 3rd,
transfer all funds
over $100.00
from [Varo Checking]
to [External Account]”

Unanswered questions:

For a sweep routine, Astra tests the balance of the target account the day BEFORE the sweep is scheduled, so this won’t work for keeping Varo Savings at $5K, because the sweep won’t be done until the day AFTER the interest is paid. (Bye bye, 5% APY for the entire month!) Is there another routine that will keep a balance at or below a maximum on the SAME day?

What does Astra do for a routine scheduled for, say, the 29th of the month in a month with only 28 days?

Is there a way to sweep in exactly the $ needed to top off an account? For example, “Starting on July 2, every Month on the 2nd, if the balance in [Varo Savings] is below $5000, sweep in [the exact amount missing] from [Varo Checking]”. As far as I can tell, you can only sweep in a specific amount, say $25.

ShawntheShawn

Man… calculate the extra interest by keeping a perfect $5K for every month instead of $4999-ish in some months. It is neglibile, not worth the time to crack Astra.

YarnDruid
YarnDruid

ShawntheShawn Ah, but what you don’t know about me is this: I’m a retired (but not quite recovering) software engineer. If I see something that can be programmed, I. MUST. PROGRAM. IT.

Actually fixed someone’s programmable thermostat at a housewarming party once (yeah – life of the party, that’s me! *snerk*)

ShawntheShawn

YarnDruid you have my 👍. You also reminded me of my god damn pursuit of perfection in some cases. Hope you will discover more tricks of Astra or other tools that will benefit some of us if not all.

YarnDruid
YarnDruid

Thanks ShawntheShawn!

That’s what’s so interesting about DoC. I’m pretty much an anti-social curmudgeon at heart, and I’ve never engaged in social media before….

BUT all the really useful stuff I’ve learned here from DoC have made me want to share what I learn. It’s actually kinda fun!

(Who knew?)

Darlene
Darlene

YarnDruid I’m just curious… with Astra routines or transfers how do you maintain the “direct deposit” requirement each month automatically? Or does Varo only require an Astra “direct deposit” of any amount to qualify for the 5% rate? For example, could I do an Astra transfer into Varo Savings for $1 each month and get the 5% qualification and then simply transfer any amount over 5k (from interest) out of Savings? ShawntheShawn

ShawntheShawn

You need $1000+ DD to qualify for 5% APY. Darlene

Kaching
Kaching

Good news! I can confirm that Astra works to trigger Varo’s monthly direct deposit requirement. Here is my timeline:

6/2: I initiated a $1000 transfer from PNC to Varo via Astra. I named my Astra one-time transfer routine “Direct Deposit.”

6/7: That $1000 was posted to my Varo checking account with the description “FROM Astra Inc., Astra Inc.”

6/8: I received this email: “Amazing! You’re now earning 5.00% APY.” I clicked on my Varo Savings account to check. The APY does indeed say 5.00%, whereas the day before it was 1.20%.

Since I now know for sure that it works, I will create a recurring transfer routine.

YarnDruid
YarnDruid

Congrats, Kaching! I was just headed here to say the same thing.

In my case, I named my Astra transfer “Payroll”. It arrived at Varo on Thu, 6/9, but didn’t look like it was treated as a DD (no APY increase). But just past midnight this morning (Mon, 6/13), I got the same 5% confirming email. Woohoo!

So, in my personal experience, Wise transfers with reference code “Direct Dep”, and Astra transfers named “Payroll” both work to earn 5% APY on Varo Savings.

Out of desperation, was gonna try a transfer from Alliant CU next, but I guess I’ll send that $1K off to Bank of America to see if it triggers a DD there.

Kaching
Kaching

YarnDruid, someone down below by the name of Carson C said that they used “Direct Dep” with Astra to trigger the qualifying DD. Therefore, I suspected Varo doesn’t care what you name your Astra routine. My conscience got the better of me with regards to naming it “Payroll” since it really isn’t actually from payroll. I didn’t want to expose myself to risk of getting into trouble so that’s why I named my Astra routine “Direct Deposit.”

YarnDruid
YarnDruid

Kaching Thanks for the explanation — and for having a conscience! LOL!

Would be nice to only have to remember one name/code, namely “Direct Dep”.

YarnDruid
YarnDruid

Kaching “I suspected Varo doesn’t care what you name your Astra routine.”

A word to the Wise (pun intended): what you name the transfer definitely DOES matter for Wise. Back in April, I forgot to put “Direct Dep” in the Reference Code field for a Wise transfer to Varo, and it was not treated as a DD. When I did a 2nd transfer the same day with “Direct Dep”, it triggered the higher APY.

Not sure if this applies to Astra transfers, so YMMV.

(Looking back, I also now realize that I had already tried a transfer from Alliant CU (& First Tech CU & Fidelity CMA & Ally Bank), which did not work. So, my soon-to-be-triggered desperation transfer would have failed, anyway. I’m glad I got the 5% email today, saved me having to wait for a transfer that fails.)

Daniel
Daniel

lol guys.. the naming of transfers/routines in Astra is just for your viewing within the app.. it does not code those names into the transfers.. it does not matter what you name them, whatsoever.

Yes Wise is different because it actually does code your transfer reference into the deposit bank description

killdozer
killdozer

Thank you and others for sharing this info