Best for Making the Most of Savings
Varo
1.2%–5%
APY
Best for Customers on Tight Budgets
Chime
0.50%
APY
by Dana Miranda, CEPF®
Contributor
Tired of looking for a branch or navigating a clunky app when you need to manage your bank account?
For anyone who’s ready to walk away from traditional branch banks, an industry of online challenger banks has blown up over the past decade. Technology companies have swooped in to respond to the need for more mobility, better apps and lower fees.
Varo and Chime, two of the top players in the online banking space, compete for customers with no-fee bank accounts and high-yield savings you can set up and manage from your smartphone.
Varo (previously Varo Money) and Chime each offer checking and savings accounts through user-friendly mobile apps and online banking. Here’s how the companies stack up.
Varo vs. Chime at a Glance
Chime is known for fee-free services, so you won’t pay for much. You’ll just pay a $2.50 out-of-network ATM fee, plus any fee charged by the ATM operator. And you could pay up to $4.95 to withdraw or deposit cash through your debit card at a Green Dot retail location.
Varo was the first banking app to gain approval for a full bank charter in the U.S. That means it’s its own bank, unlike other banking apps, which provide technology and work with national banks to provide the financial services and accounts behind the scenes.
It hasn’t yet taken full advantage of its status to offer a full suite of financial services, but it does offer services beyond its original stripped-down checking and savings account, including a credit builder program and small cash advance loans.
Nearly all Varo features are fee free. You’ll just pay $2.50 to Varo to use an out-of-network ATM, plus third-party ATM fees. And you could pay a third-party fee up to $4.95 to the retailer if you deposit or withdraw cash over-the-counter at a Green Dot location. If you use Varo Advance, you’ll pay a fee between $0 and $5, depending on how much cash you draw.
When you open a Varo savings account, you’ll start with a 1.2% APY, and you can earn up to 5% on savings balances up to $5,000 as long as you receive at least $1,000 in direct deposits each month.
Chime and Varo offer most of the same account options aimed at simplifying banking and savings for anyone who’s ready to say goodbye to traditional banks.
Both accounts offer these features:
Both Chime and Varo include a debit account (a.k.a. checking) and optional savings account, both with no monthly fees.
Both accounts include simple ways to automatically build your savings account by setting rules to move money from checking to savings when you get paid and when you shop.
Both savings accounts offer higher-than-average APY on your savings account balance.
Chime offers 0.50% APY on savings with no minimum balance requirement.
Varo offers 1.20% APY on savings to any customers, and you can earn 5.00% APY in a given month if you receive at least $1,000 in direct deposits, maintain a minimum balance of no more than $5,000 and keep both of your accounts above a $0 balance during that month.
As with many online banks, both accounts make your paycheck available early if you get paid through direct deposit. The money is available in your account as soon as your employer processes payroll, which could be up to two days before the scheduled payday.
Through Chime’s SpotMe overdraft protection program, the company will spot you up to $20 with no fee as long as your account has at least $500 per month in direct deposits. That limit can go up to $200 based on your account activity.
Through Varo Advance, you can add instant overdraft protection through the app with a small cash advance loan of $20, $50, $75 or $100, for a fee of $0, $3, $4 or $5, respectively.
With both Varo and Chime, you can deposit cash into your bank account at more than 60,000 retail locations with Green Dot, which is a function many online banks don’t include.
With either account, you can pay bills through ACH transfer by giving companies your bank account and routing numbers, or mail a paper check.
Both companies provide FDIC-insured accounts up to $250,000 (the typical amount for any bank account). Chime partners with The Bancorp Bank and Stride Bank, N.A., and Varo Money is backed by its own Varo Bank.
With both Chime and Varo, you can send money instantly with no fees to others who use the same app. Varo Bank also works with Zelle for money transfers to folks who use other banks.
Neither company uses ChexSystems, which many traditional financial institutions use to determine your eligibility for a bank account, so a bad banking history won’t necessarily disqualify you for these accounts. Neither company checks your credit report for a banking account or credit builder card, either.
A Chime account gives you access to 38,000 fee-free ATMs in the United States through the MoneyPass and Visa Plus Alliance networks. Varo’s account connects you to more than 55,000 fee-free Allpoint ATMs in the U.S.
Talk to a real person from either company via chat in its app, email or on the phone seven days a week.
Reach Chime customer service 24/7 via chat in the app, email at [email protected] or by phone at 844-244-6363.
Reach Varo customer service via email at [email protected], or by phone at 877-377-8276 during call center hours: Monday through Friday 7 a.m. to 6 p.m. Mountain Time, and Saturday, Sunday and federal holidays 7 a.m. to 3 p.m. Mountain Time.
Stay on top of your Varo account balance with optional notifications anytime money moves in or out of your account. Chime gives you the option to receive  a push notification when a direct deposit hits.
Both companies offer a new, secure way to build credit.
Chime’s Credit Builder Visa credit card is a secured credit card with no annual fee, no credit check to apply and no minimum required deposit (an unusual feature for a secured card). It works like a debit card that lets you build credit.
Through the program, Chime members can move money into their Credit Builder account to back the card, make purchases with the card and have the balance automatically paid off from their Credit Builder account. Chime reports activity to credit bureaus, so the card is a less risky way to build or rebuild your credit.
Varo’s Varo Believe program is nearly identical, backing a secured credit card with a dedicated amount of your choice from your Varo Bank account.
Neither platform offers these features:
We’ve gathered the pros and cons of Varo and Chime to help you decide which banking institution is right for you.
We’ve found the answers to the most commonly asked questions about Varo and Chime.
Chime and Varo are distinct companies operating online banking apps, but they each offer similar services, including fee-free savings and checking accounts.
Varo is a reputable and popular banking app backed by FDIC-insured accounts through Varo Bank. The mobile bank is a good option for anyone who likes online banking and has simple banking needs that don’t require all financial services to live under one roof.
Yes, Varo Bank, N.A. received approval for a U.S. bank charter in July 2020 and is an FDIC member. Varo Bank is a wholly-owned subsidiary of the financial technology company Varo Money, Inc., which operates the Varo banking app.
Current is an online bank account that offers many of the same features as Chime and other neo bank competitors. Current stands out for offering “savings pods,” which help you save toward specific goals, and separate accounts for teens.
Contributor Dana Miranda is a Certified Educator in Personal Finance® who has written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and Inc. Magazine.
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