Overdraft Protection and No Fee Overdraft

Breaking down two kinds of overdraft services.

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What is overdraft protection?

Overdraft protection is a service many banks and financial institutions offer that can help you avoid declined transactions.

With overdraft protection, a financial institution pays for a transaction when you have insufficient or unavailable funds in the account to cover the transaction. This can happen a few different ways, like bringing your account to a negative balance or linking your account to another account. The linked account could be a savings account, credit card, or line of credit.

Typical overdraft protection usually charges a fee for bringing your account negative or transferring funds from another account to cover the transaction. Some services may also charge you interest on the overdrawn amount.

What is Varo’s
No Fee Overdraft?

No Fee Overdraft is different from standard overdraft protection.

No Fee Overdraft is a feature that lets you overdraw your Varo Bank Account up to $50 on debit card purchases once you qualify, with absolutely no overdraft fees or interest charges. You can get the coverage you need, then repay the overdraft within 30 days from when your balance first goes negative. Repayment is automatically taken from your next deposit.

To use No Fee Overdraft with your Varo Bank Account, you’ll need to meet both of these requirements:

  • Make at least five Varo Visa® Debit Card purchases in each calendar month, AND
  • Receive total payroll or government direct deposits of $1,000 or more in the same calendar month. Learn more here.

No Fee Overdraft vs Overdraft Protection

No Fee Overdraft Overdraft Protection
Will I pay fees?
Nope
You might. Some overdraft protection services charge a fee for covering a transaction or if you don’t repay the overdraft on time.
Do I need another account?
Nope
Sometimes. Some overdraft protection requires you to link a savings account, credit card, or line of credit.
Am I charged interest?
Nope
Maybe. If you use a credit card or line of credit for overdraft protection, you could be charged interest on the amount of money you borrow.

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Bank Account Services provided by The Bancorp Bank. Your deposits are FDIC insured to at least $250,000 through 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.

See the Varo Bank Account and Varo Savings Account Agreement for terms and conditions