Varo Debit Card aka Varo Bank has 5 important benefits that you should know about. I am not talking about the lack of minimum balance requirement or maintenance fee. These are not benefits, rather lack of minuses. Here are 5 essential benefits that should influence your decision to open the Varo Debit Card.
Early Direct Deposit
Early direct deposit is when you receive your salary or social security benefits onto your Varo account up to 2 days earlier than in other banks. Your money become available sooner.
What it means is that if your pay day is 31st of every month, then Bank Of America, Wells Fargo, and other big banks are going to keep your money in “Pending” or “Processing” state up to the 1st day of the following month. This so called “Hold” is very common among big banks and financial institutions. Money are usually released on the next business day.
Smaller banks like Ally Bank and credit unions often release money on the same day.
Varo bank like some other online only banks clears money on the 30th, the evening before your actual payday. Other examples of such banks are Chime, SoFi, Netspend etc.
Second Chance Bank
Varo is a second chance bank. What it means? Everyone can make a financial mistake and deserve a second chance. If big banks deny your application for a checking account, it means you are on a black list of ChexSystem. The system is similar to credit bureaus, where you have a credit score. ChexSystem is used by big banks when they make a decision whether to open you a checking account or deny your application. Getting on the “bad guys” list is easy, but getting out of it takes a few years. At the same time you still have to receive your paycheck somewhere. That is when Second Chance Banks like Varo are going to help and you can get approved for an account.
Large network of ATMs
With a Varo Bank account you are getting a Varbo Debit Card that gives you access to more than 55,000 fee-free Allpoints ATMs. You can find these ATMs in popular retail stores like CVS Pharmacy, Walmart, Walgreens and other common places.
AllPoint network of ATMs is shared between many small banks, that cannot afford having their own ATMs. This business model allows AllPoint to have more ATMs than any big bank in the US. AllPoint ATMs can be co-branded with other banks or they can be owned by AllPoint.
Cash Deposits
You can deposit cash in retail stores like CVS Pharmacy, RiteAid, 7-Eleven, Walgreens, and Walmart. The deposit can cost you a fee of up to $5.95 per deposit. The deposit is limited to $1,000 per day and $5,000 per month.
To make the deposit ask the cashier to add cash directly to your Varo Debit Card using the Green Dot network.
If you want a free cash deposit, you may be better to use Chime bank that allows you to make a free deposit at Walgreens. If you don’t like Walgreens or don’t like Chime, you can turn to Capital One, which allows you to make a free deposit at CVS Pharmacy. Also having 360 checking at Capital One can increase your chance of being approved for a Capital One credit card.
Having an emergency fund is also very important. That is why you may need a savings account that pays good interest.
High Yield Savings Account
Varo Bank offers high yield savings accounts with 0.5% interest. This is quite high if you compare it with big banks like Bank Of America (0.01%). Things are getting even more interesting if you receive $1,000 per month in direct deposit. This makes you eligible for 5% interest on up to $5,000. That can earn you up to $250 per year. That is quite a nice reward for having a fat emergency fund.
Overall, I don’t like Varo bank. The only thing that makes Varo attractive to me is the 5% interest. Other online-only or mobile-only banks like Chime Bank, Capital One, Current Bank offer more valuable benefits.