Yes, Varo is a real bank, but it operates differently from the bank branch you might walk into

Varo Bank 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 meets the same legal requirements as any traditional bank and your deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account type.

The main difference is that Varo operates entirely online — there are no physical branches. You manage your account through a mobile app or website, deposit checks by taking a photo, and withdraw cash at ATMs. For people new to banking or returning after a gap, this can feel unfamiliar at first, but the protections and rules that govern your money are the same as at any other bank.

Varo was founded in 2013 and received its federal banking charter in 2020. Before that, it operated as a fintech company partnering with other banks. The charter means Varo itself now holds your deposits and makes lending decisions, rather than passing those functions to another institution.

Key Takeaways

  • Varo is licensed by the Office of the Comptroller of the Currency and insured by the FDIC, making it a legitimate bank with federal oversight.
  • Your deposits are protected up to $250,000 per account type, the same as at any brick-and-mortar bank.
  • Varo operates only online through its app and website, with no physical branches to visit in person.
  • You can deposit checks by photographing them and withdraw cash at ATMs, but you cannot deposit cash directly at a Varo location.

How Varo's federal charter works

A federal banking charter is a license issued by the OCC that allows a company to operate as a bank. To receive one, Varo had to meet strict capital requirements, pass safety and soundness exams, and prove it could manage customer deposits responsibly. The OCC continues to examine Varo regularly to may support it follows banking laws.

This charter is what makes Varo a "real bank" in the legal sense. It is not a credit union, not a money services business, and not a fintech app that partners with another bank. Varo holds your money directly and is subject to the same federal regulations as JPMorgan Chase or Bank of America.

The FDIC insurance that comes with a federal charter means that if Varo were to fail, the government would reimburse you for deposits up to $250,000. This protection applies separately to different account types — for example, a checking account and a savings account are insured separately, so you could have $250,000 in each.

What makes Varo different from a traditional bank

Varo is a real bank, but it is a digital-only bank. You cannot walk into a Varo location, speak to a teller, or deposit cash over the counter. Everything happens through the app or website. For some people, this is a major advantage — no branch hours to work around, no lines, and you can manage your account from anywhere with internet.

For others, the lack of physical locations is a drawback. If you need to deposit cash, you cannot do it directly at Varo. You can deposit checks by photograph, but cash requires a workaround — some customers use ATMs that accept cash deposits, though not all ATM networks are available everywhere. If you prefer face-to-face banking, Varo is not the right choice.

Varo also does not offer some services that traditional banks do, such as safe deposit boxes, notary services, or wire transfers through the app (though you may be able to request a wire by contacting support). These gaps matter only if you actually need those services.

FDIC insurance and deposit protection

Because Varo is a federally chartered bank, your deposits are covered by FDIC insurance. This is not a promise from Varo itself — it is a may provide from the federal government. If the bank fails, the FDIC steps in and pays you back, up to the insurance limit.

The standard limit is $250,000 per depositor, per bank, per account type. This means if you have $100,000 in a Varo checking account and $150,000 in a Varo savings account, both are fully protected. If you have $300,000 in a single checking account, only $250,000 is insured and you would lose the rest.

Joint accounts are insured separately, so if you and a spouse each own half of a joint account with $500,000, you each have $250,000 of coverage. The FDIC website has a calculator that shows exactly how much of your money is covered based on how you hold the account.

How to verify Varo's banking status yourself

You do not have to take anyone's word for it. The FDIC maintains a public database called the FDIC BankFind tool where you can search for any bank by name. Search for "Varo Bank" and you will see its charter number, the date it was chartered, and confirmation that deposits are FDIC-insured.

You can also check the OCC's public database, which lists all federally chartered banks and shows examination results and enforcement actions. These databases are free and open to anyone. If a bank is not listed in either database, it is not a federally chartered bank and you should be cautious about depositing money there.

The fact that Varo appears in both databases is what makes it a real bank. The federal government has examined it, approved it, and continues to oversee it. This is different from a fintech app that uses another bank's charter or a money transfer service that is not a bank at all.

What to watch for when choosing an online bank

Not every company that looks like a bank is actually a bank. Some fintech apps partner with a real bank behind the scenes — your money is held by that partner bank, not by the app company. Others are money transfer services or payment platforms that are not banks at all. These are not necessarily bad, but they operate under different rules and may not have FDIC insurance.

Before opening an account anywhere, check whether the company has its own federal or state banking charter. If it does, it is a real bank. If it says "banking services provided by [another bank name]," then you are actually banking with that other institution, not the app. If it does not mention a bank at all, it may not be a bank.

Varo's charter means you are banking directly with Varo, not through a partner. Your deposits go into Varo's accounts and are insured by the FDIC. This is the same legal standing as any other bank, whether it has branches or not.

Frequently Asked Questions

Is my money safe at Varo if it is only online?

Yes. The fact that Varo is online does not affect FDIC insurance or federal oversight. Your deposits are protected the same way they would be at a bank with physical branches. The OCC examines Varo regularly to may support it follows banking laws and keeps customer money find.

Can I get my money out if Varo closes?

Yes. If Varo were to fail, the FDIC would reimburse you for deposits up to $250,000 per account type. The FDIC has a track record of paying depositors within days of a bank closure. Your money is not locked in — you can withdraw it anytime through the app or ATM.

What is the difference between Varo and a credit union?

Varo is a bank chartered by the federal government. A credit union is a different type of financial institution, usually owned by its members and regulated by the National Credit Union Administration (NCUA). Both can offer checking and savings accounts, but they operate under different rules and insurance systems.

Does Varo have the same regulations as big banks?

Yes. Varo is subject to the same federal banking laws as JPMorgan Chase, Bank of America, or any other bank. The OCC examines Varo using the same standards it uses for larger banks. The main difference is size and the services offered, not the level of regulation.

How do I know if a bank is federally chartered?

Search for the bank's name in the FDIC BankFind tool or the OCC's public database. Both are free and open to anyone. If the bank appears in either database with a charter number and date, it is federally chartered. If it does not appear, it is not a federally chartered bank.