CEO Colin Walsh: “Banks should be doing more to help American consumers save.”
SAN FRANCISCO – January 29, 2019 – In a move to make high-yield savings available to more Americans, no-fee mobile banking company Varo Money, Inc., announced today that it raised the Annual Percentage Yield (“APY”) on its FDIC-insured Varo Savings Account to 2.80% for customers whose Savings Account balance is $50,000 or less, and who have qualifying direct deposits and debit card purchases from their Varo Bank Account.1 An APY of 2.12%1 will apply if these conditions are not met.
“We’ve got a serious savings problem going on in America and banks aren’t doing enough to address it,” said co-founder and CEO Colin Walsh. “Four in 10 Americans can’t cover a $400 surprise expense without selling something or going into debt, and the typical working-age household has only $3,000 in retirement assets. Varo is on a mission to help improve people’s financial well-being and we’re proud to put a stake in the ground with a market-leading rate for FDIC-insured accounts.”
Varo’s new 2.80% APY for qualifying customers is more than triple the 12-month average national CD rate, and far outstrips the paltry 0.09% APY that is the national average.2 Varo’s 2.80% APY also significantly outpaces inflation, which was 2.3% on average in 2018 and is expected to remain at that level in 2019.
Starting January 29, 2019, all Varo customers who have payroll or government direct deposits into their Varo Bank Account totaling $1,000 or more each month, make at least five purchases with the Varo Visa® Debit Card each month, and have a balance of $50,000 or less in their Savings Account will be paid 2.80% APY. For Savings Accounts with a balance exceeding $50,000 or that do not meet the other qualifications, an APY of 2.12% will apply. Varo Bank and Savings Accounts are provided by The Bancorp Bank, Member FDIC, and deposits are FDIC-insured up to $250,000. Varo has no minimum balance requirements and charges no fees.3
“Banks collected $34 BILLION in overdraft fees4 alone from hard-working Americans last year, and many paid very close to zero in interest on the savings customers trusted them with. That’s just not fair,” Walsh said. “We believe consumers deserve bank accounts that don’t charge fees and help them save.”
In addition to no-fee banking services and a market-leading savings rate, Varo offers tools including Save Your Pay and Save Your Change that automate savings to help consumers save more easily. Varo is available in the Google Play Store with an Android version of its banking app and available through its iOS app in the App Store, where it has more than 13,000 reviews and an average rating of 4.7 stars.
On track to become the first mobile-centric national bank in U.S. history, Varo believes banking should be fee-free, easy, and accessible to everyone through a smartphone. In August 2018, Varo was granted preliminary approval for a national bank charter by the Office of the Comptroller of the Currency (OCC). When it opens as a national bank, Varo will offer customers an expanded range of banking products and solutions with the highest standards of consumer protection.
Varo was founded in 2015 and has raised more than $144M in funding with Warburg Pincus and The Rise Fund, a global impact fund led by private equity firm TPG as lead investors.
About Varo Money
Varo Money, Inc. (“Varo”) is on a mission to redefine banking so it’s easy for everyone to make smart choices with their money. In one mobile app, Varo offers customers no-cost5 premium bank accounts and high-interest savings accounts offered through The Bancorp Bank, and tech-first features to help people manage their money more easily. As a fintech leader, Varo has been granted preliminary approval for a de novo national bank charter by the Office of the Comptroller of the Currency (OCC), and is set to become the first mobile-centric national bank in U.S. history. Based in San Francisco and Utah and privately held, Varo has raised $144M to date, led by Warburg Pincus. Varo Personal Loans are offered by Varo Money, Inc., under state licenses, subject to application approval. For more information, visit www.varomoney.com, like Varo on Facebook, and follow us on Instagram and Twitter @varomoney.
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.
1To earn 2.80% APY, the Savings Account balance must be $50,000 or less and the customer must meet both of the following requirements. If the Savings Account balance is above $50,000, or both of the following conditions are not met, the APY will be 2.12% on the entire Savings Account balance:
- Receive payroll or government direct deposits totaling at least $1,000 each month into the Varo Bank Account
- Use the Varo Visa® Debit Card to authorize at least 5 purchases each month (excluding ATM or Over-the-Counter Cash Withdrawals and P2P transfers)
New customers seeking to qualify for 2.80% APY will first need to set up direct deposit and receive their debit card in the mail and activate it. Until the qualifying direct deposit(s) are posted and debit card purchase transactions made, they will earn 2.12% APY.
The APYs are accurate as of January 29, 2019; rates are variable and may change. There is no minimum balance required to open the account. Balance in Savings Account must be at least $0.01 to earn interest.
2National average APY for 12-month CD (0.68% APY) accurate as of January 16, 2019 as published in the FDIC’s Weekly National Rates and Rate Caps; the national average APY is accurate as of January 11, 2019, as published in the FDIC’s Weekly National Rates and Rate Caps, average rate is for deposits under $100,000.
3Varo charges no fees for banking services. While Varo does not charge fees for ATM withdrawals, some third-party ATM operators may charge a fee. To avoid ATM fees altogether, customers can use an Allpoint Network® ATM. There are more than 55,000 Allpoint locations worldwide.