Yes, Varo is a bank, but not the kind with branches

Varo is a federally chartered bank licensed and regulated by the Office of the Comptroller of the Currency (OCC), which is part of the U.S. Department of the Treasury. This means it has the same legal standing as traditional banks with physical locations — your deposits are insured the same way, and it must follow the same federal rules.

The difference is that Varo operates entirely online. You cannot walk into a Varo office or speak to a teller in person. Everything happens through a mobile app or website: opening an account, depositing checks by photograph, transferring money, and customer service through chat or phone.

Because Varo has no physical branches and lower overhead costs, it typically charges no monthly fees and pays higher interest rates on savings accounts than many traditional banks. The tradeoff is that you handle everything yourself through the app — there is no one to meet with face-to-face.

Key Takeaways

  • Varo holds a federal banking charter from the OCC, making it a legitimate bank regulated by the U.S. government, not a fintech company or money service.
  • Your money in a Varo account is protected by FDIC insurance up to $250,000, the same as at any other bank.
  • Varo has no physical branches — all banking happens through the mobile app or website, including deposits, transfers, and customer support.
  • Varo charges no monthly account fees and typically offers higher interest rates on savings because it operates with lower costs than traditional banks.

How Varo's charter is different from other online banks

Not all online banks are chartered banks. Some are fintech companies that partner with a chartered bank behind the scenes — you think you are banking with them, but another bank actually holds your money. Varo is different: it is the bank itself, not a middleman.

This matters because a chartered bank answers directly to federal regulators. The OCC examines Varo's operations, capital reserves, and lending practices. If Varo failed, the FDIC would step in to protect your deposits, just as it would for Bank of America or Wells Fargo.

Varo received its charter in 2020, making it one of the newer federally chartered banks in the country. Before that, it operated as a fintech company partnering with other banks. The charter upgrade meant Varo could offer more products and operate with more independence.

What FDIC insurance means for your money

When you deposit money at Varo, the FDIC insures it up to $250,000 per account owner per bank. This means if Varo failed tomorrow, the federal government would reimburse you for the full balance, up to that limit.

The $250,000 limit applies to the total across all your accounts at Varo — if you have a checking account and a savings account there, they count together toward the limit. If you have a spouse with a separate account at Varo, their $250,000 is separate from yours.

This protection is automatic. You do not have to do anything to set up it, and Varo does not charge for it. It is a federal may provide that applies to any bank with FDIC membership.

Why Varo is regulated like a traditional bank

Because Varo holds a federal charter, it must meet the same capital requirements, lending standards, and consumer protection rules as any other bank. The OCC conducts regular examinations and can require Varo to change its practices if it finds problems.

This regulation is why Varo can offer FDIC-insured accounts and why your deposits have the same legal protection as money at a big national bank. The regulation also means Varo cannot suddenly change its terms or disappear without oversight — federal regulators would intervene first.

Varo is also subject to the Truth in Savings Act, which requires banks to disclose interest rates and fees clearly. It must comply with anti-discrimination laws and consumer privacy rules. These are the same rules that explore to every other bank in the country.

The difference between a bank and a money service app

Some apps that handle money — like PayPal, Square Cash, or Venmo — are not banks. They are money services or fintech platforms. They can move money and hold balances, but they do not have a banking charter and are not FDIC-insured in the same way.

Varo is a bank, which means it can take deposits, offer interest-bearing accounts, and make loans. A money service app typically cannot do these things — it can only move money that already exists.

If you are deciding whether to trust an app with your money, one question to ask is: "Does this company have a federal banking charter?" If yes, it is a bank and your deposits are federally insured. If no, it is a fintech company or money service, and the protections are different.

What you can and cannot do at Varo

Varo offers checking and savings accounts, debit cards, and transfers between accounts and to other banks. You can deposit checks by taking a photo with the app. You can set up direct deposit from an employer. You can pay bills through the app.

Varo does not offer credit cards, loans, or investment accounts. If you need a mortgage, auto loan, or credit card, you would have to go elsewhere. Varo is focused on checking and savings products for people who want a straightforward, low-fee online bank.

Customer service is available by phone and in-app chat during business hours. Because there are no branches, you cannot deposit cash in person or speak to someone face-to-face. If you need to deposit cash, you would have to use an ATM at another bank and transfer the money, or ask someone to deposit a check on your behalf.

How Varo compares to traditional banks and other online banks

Varo is more like a traditional bank than a fintech app, because it holds its own charter and is directly regulated. However, it is more like an online bank than a traditional bank, because it has no branches and no in-person services.

Other online banks like Ally, Charles Schwab Bank, and Discover Bank are also federally chartered and FDIC-insured. The main differences between them are interest rates, fees, and which products they offer. Varo tends to have no monthly fees and competitive interest rates, which is why some people choose it over traditional banks.

If you prefer in-person banking, a traditional bank with branches is a better fit. If you are comfortable with online-only banking and want low fees and good interest rates, Varo and similar online banks are worth considering.

Frequently Asked Questions

Is my money safe at Varo if the company goes out of business?

Yes. Your deposits are insured by the FDIC up to $250,000. If Varo failed, the FDIC would pay you back in full, up to that limit. This protection is the same as at any other bank with FDIC insurance.

Can I deposit cash at Varo?

Not directly. Varo has no branches or ATMs where you can deposit cash. You can deposit checks by photo through the app, or transfer money from another bank account. If you need to deposit cash, you would have to deposit it at another bank and transfer it to Varo.

Does Varo offer credit cards or loans?

Varo offers checking and savings accounts and a debit card, but not credit cards or loans. If you need a credit card or loan, you would have to explore with a different bank or lender.

Who regulates Varo?

The Office of the Comptroller of the Currency (OCC), which is part of the U.S. Department of the Treasury, regulates Varo. The OCC examines Varo regularly and enforces federal banking rules. The FDIC also insures Varo deposits.

How is Varo different from PayPal or Venmo?

Varo is a bank with a federal charter. PayPal and Venmo are fintech companies that move money but do not have banking charters. Varo deposits are FDIC-insured; money held in PayPal or Venmo may not be insured the same way. Varo can offer interest-bearing savings accounts; PayPal and Venmo cannot.