Worth
Money

Varo vs. Big Banks: The Savings Rate Challenge

 

You’ve scrimped, you’ve sacrificed, you’ve brown bagged your lunch all year in order to build up your nest egg. Now it’s time to get the most out of your savings with a High-Yield Savings Account.

At Varo, we’re thrilled to announce our savings interest rate is now 1.75% Annual Percentage Yield* (APY)—significantly higher than the average of the five biggest banks in the country.**

Here’s what you need to know about opening a high-interest Savings Account at Varo:

  1. It’s free. There are no minimum balance requirements and no fees.* It’s just a great place to stash cash and earn high interest on it, whether that’s your first $500 toward a rainy day fund or your $2,500 tax refund.
  2. It’s accessible. You can access your savings account 24/7—you don’t need to wait for a weekday or banking hours. Need to tap into savings? You can move money out of your savings account up to six times per month.
  3. It’s easy. Your Varo Savings Account is attached to your Varo Bank Account. You can move money from your Bank Account into your Savings Account as much as you like.
  4. It’s automatic. When you turn on Save Your Change, we’ll round up every transaction you make and transfer the difference from your Varo Bank Account into your Varo Savings Account. With Save Your Pay, we’ll automatically sweep a percentage of each direct deposit into savings.

Why are Varo’s rates so awesome (and some big bank rates so dismal?)

Great question. We offer great rates to our customers for a few reasons.

First, we’re all online—our only branch is right there on your smartphone. That means our costs are low; we don’t have to pay for buildings, or parking lots, or other expensive infrastructure.

Next, our mission is not just to make banking better but to also improve your financial health. While the Varo app has great features to help you budget and see how you’re doing money-wise each month, we don’t want you to miss out on getting the most out of your savings too.

So now, you’re probably wondering why some big banks have such low rates in comparison. Well, one reason is that they have no real incentive to raise them—they are hoping that customers who have been with them awhile will just stick around for no other reason except inertia. But that inertia has a real cost to you.

Consider a savings pot of $10,000. With Varo’s current rate, you’ll earn about $175 in interest in 12 months. That same $10,000 parked in a Savings Account at one of these big banks would only earn you about $3 on average.

Beyond the low rates, many big banks also have minimum balance requirements or monthly fees. It’s up to you read the fine print.

People deserve better—that’s why Varo is here.

*Varo Annual Percentage Yield (APY) comparison is accurate as of 10.01.2018. Keep in mind, this rate is variable and may change. The balance in Savings must be at least $0.01 to earn interest.

**APYs for other banks are an average of 5 biggest national banks and provided by mybanktracker.com. They are accurate as of 10.01.2018.

Bank Account Services provided by The Bancorp Bank; Member FDIC.

The Varo Visa® Debit Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc and may be used everywhere Visa debit cards are accepted.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank (“Bank”).  Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s).