SAN FRANCISCO—March 6, 2018— Mobile banking startup Varo Money, Inc. is demonstrating its commitment to help Americans build real savings with the launch of 1.25% annual percentage yield (APY) on their savings account*. The top 5 largest national banks offer 0.01-0.04%.**
Varo is also announcing a new product feature, SMS Alerts, which make it easier for customers to track their spending and see where their money is going. The company built this feature in response to survey findings that show too many Americans—and millennials in particular—need help with their overall financial health, both to build emergency savings and to avoid a perpetual state of stress about money.
This update comes just two months after Varo closed a $45M Series B funding round led by Warburg Pincus and The Rise Fund, a global impact fund led by private equity firm TPG.
“As a company, we are extremely motivated by our mission of improving consumer financial health,” said Colin Walsh, co-founder and CEO of Varo Money. “A bank account shouldn’t just be a place that holds your money—Americans deserve a bank account that actively helps them achieve their financial goals. By providing alert capabilities and increasing the rate on savings accounts, Varo is helping customers accomplish that very thing.”
A recent survey of more than 1,000 U.S. adults age 18+, conducted by Propeller Insights on behalf of Varo Money, determined that 85 percent of American adults sometimes feel stressed out about money, and a full 30 percent feel stressed out about money constantly.
According to the survey findings, two-thirds (66 percent) of American adults—including 71 percent of millennials—do not have a three-month emergency fund, and almost half (46 percent) don’t have any savings set aside for unexpected expenses. Certain events would throw these Americans into financial chaos, particularly job loss (36 percent), personal injury (35 percent), car trouble (33 percent), and even a pet care emergency (18 percent).
Varo is using mobile technology and intuitive design to change the future of banking. It offers customers a convenient all-mobile bank account through The Bancorp Bank that’s designed to help them get ahead financially by featuring integrated banking and savings. Varo also offers lending products to qualified customers to help smooth cash flow and build savings—all from their phones.
Varo’s 1.25% APY Savings Accounts have no fees or minimum balances and offer a rate that is more than 60x the average rate offered by the top 5 largest national banks. According to mybanktracker.com, the top 5 largest national banks offer an average of 0.02% APY, and many traditional bank savings accounts have a minimum balance requirement or fees.
Varo’s two new features are part of its continued expansion of features and focus on financial health for Varo customers:
Varo’s digital model eliminates the fees that traditional banks often charge, such as minimum balance fees and foreign transaction fees. In addition, Varo does not charge ATM fees at a network of more than 55,000 Allpoint ATMs worldwide. Allpoint ATMs are located in popular retail stores—like Target, Costco, Walgreens, and CVS—so customers don’t have to go out of their way to get cash at a bank branch ATM.
*Varo’s Savings interest rate is variable and may change. The balance in savings must be at least $0.01 to earn interest. The APY disclosed is accurate as of March 6, 2018.
**APYs for other banks provided by mybanktracker.com.
Varo Money, Inc. (“Varo”) is changing the future of banking with their mobile app: a convenient, all-in-one bank account offered through The Bancorp Bank that also helps customers do more with their money. Varo is building a mobile banking experience that helps customers cover their expenses, pay their bills and build their wealth over time — so they can stop worrying about money and go live their lives. Unlike traditional banks or other fintech apps, Varo offers a complete solution with integrated deposit, budgeting, savings, and lending products to help customers bank with ease and achieve better financial outcomes. There’s no reason for a bank branch on every corner anymore: all that customers need is a smartphone to bank seamlessly. Based in San Francisco and privately held, Varo has raised $78M to date, led by Warburg Pincus. Varo bank accounts are provided by The Bancorp Bank, and deposits are FDIC-insured up to $250,000 through The Bancorp Bank; Member FDIC. The Varo Personal Loan is offered by Varo Money, Inc. under state licenses, subject to application approval. For more information, please visit www.varomoney.com and follow Varo on Facebook @varomoney or Twitter @varomoney.
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