Varo Bank vs. Chime: Which is the better account to have?

A lot of industries have been moving their businesses online as more people shift their focus. One of them is finance as more people seek online banking solutions. If you’re among those who have been searching for an online banking partner, chances are you have come across Varo Bank vs. Chime. Both of these companies are credible and offer quality services, but you can only use one. So, let’s see how they compare in different aspects. 

Varo Bank

Previously known as Varo Money, the company first came about in 2016 after receiving $28.4 million in a private equity funding round. Following a successful Series D round of funding in February 2021, Varo Bank had raised $482.4 million. The company claims to have over 3 million bank accounts and that deposits are up 900% YoY while spend is up 300% YoY. 

As of July 31, 2020, Varo Bank received a national bank charter from the office of the Comptroller of the Currency. The charter elevates Varo from a mere neobank to a national bank, indicating the high level of trust in the company. It also provides security because it is FDIC insured by up to $250,000 so you know that your money is safe.


It was among the first online banks launched in the US back in 2013 at a time when the idea was still new. The company wants to ‘change the way people think about banking’, which would help explain why it was first launched on the Dr Phil show. Nevertheless, Chime quickly became a leader in online banking and continued to receive backing from major investors to the tune of $1.5 billion as of 2020 at a valuation of $5.8 billion.

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Data from Cornerstone Advisors and StrategyCorps shows that Chime has over 12 million customers by February 2021 and is therefore the most popular ‘neobank’ in the US. Indeed, Chime was the first to popularize the idea of online banking with little to no fees, higher than average interest rates and an easy banking experience. 

Varo Bank vs. Chime comparison

Varo BankChime
Checking accountYesYes
Savings accountYesYes
Fees$2.50 for out-of network ATM withdrawal
$5.95 for cash deposits
Between $0 and $5 for Varo Advance
$2.50 for out-of network ATM withdrawal
$5.95 for cash deposits
SecurityChartered national bankFDIC insured
Paper checksNoYes

Ease of use

Varo bank

Creating an account with Varo Bank is as easy as creating an account on your favourite social media platform. All you need is to download the app to your smartphone and enter your details. You will find the app on both iOS and Android app stores and can use multiple devices simultaneously. 

Once your account is created, you can immediately start making transactions on it, meaning you can receive and send money. There is no minimum deposit required after opening an account so you can start with as little as possible. With the account, you get a checking and savings account plus 


Like Varo, getting started at Chime is just as easy and only involves downloading the app on your mobile device. It too is available on iOS and Android and you can have the app on multiple devices at the same time. Also similar to Varo Bank, there are no minimum deposit requirements and you can start transacting through a checking or savings account. 

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Varo Bank

One of the best features of Varo is that it doesn’t have many fees, whether they are monthly maintenance fees, transaction fees or foreign transaction fees. However, you can only withdraw cash for free through the network of over 60,000 Allpoint ATMs or be charged $2.50 and additional fees by the ATM owner. Cash deposits are also charged $5.95 at all outlets supporting the Green Dot network such as CVS and Walgreens. Finally, cash advances of over $20 will be charged a flat fee depending on the amount. 


The fee schedule at Chime is very similar to Varo’s because they both function through the same network of Allpoint ATMS. This means a $2.50 fee for out of network ATM withdrawal and a $5.95 fee for deposits at Green Dot outlets. However, you won’t be charged for the overdraft service called SpotMe, which can be as high as $200. 


Varo Bank

The standard APY is 0.20%, but if you receive at least $1,000 in direct deposits every month, you qualify for a higher APY of 3.00%. For comparison, the national average APY is 0.06%, so this is very impressive. To increase savings, you can set up a plan that rounds up transactions and sends the remaining cents to savings or one that automatically saves a portion of your salary. 


Chime offers a standard APY of 0.50% for all users with the addition of automatic saving features such as those provided by Varo. 

Verdict: Which one is better?

Each of these companies have unique advantages that makes it difficult to identify one as the better one. That being said, Varo Bank has a higher APY for active users compared to Chime making it ideal for anyone interested in long-term saving. On the other hand, Chime does not charge for overdraft services so it’s more suited to an individual who makes frequent withdrawals.

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How safe is online banking?

The FDIC insures Chime and Varo for up to $250,000.

What is the minimum deposit required?

No minimum deposit is required on either Chime or Varo Bank

How much will I be charged in fees?

Fees will only be charged for out-of-network ATM withdrawals and cash deposits at Green Dot outlets.

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