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Regular Cuts On APY
Totally untrustworthy if you want to use this bank looking at the Savings APY. They keep cutting APY on regular basis, and you'll never keep your APY you signed up for longer than some weeks. I joined with 0.40%, 1 month later they cut to 0.20%. Their high yield was 2.80% topped $10k, it's been raised 0.2% to 3% but the limit cut in half to $5k. So, in real life, you end up with less money. I should have believed in many, many, many customer reviews everywhere stating the same situation.
Incompetence Vs Interest Rate
*****2/18/2021 update: I raise my rating from one star to two. Varo earned my upgrade by 1) obtaining their banking charter in October 2020 and 2) recoding their app and website. Varo will earn a higher score when it offers 1) beneficiary designation for an account, 2) joint accounts, and 3) better-trained service reps. See updates to my original critiques below for details on the above.*****
Varo isn't the only fintech that uses borrowed credentials (via Plaid) to access third-party accounts - I allow my HSA fintech to access my brokerage in this manner.
Varo, however, is a different story altogether.
First, Varo uses Bancorp as their back office (transaction processing), so there are actually three potential security targets. Three! Varo claims that they are moving to have their own banking charter (so they don't have to rely on Bancorp), but in the meantime... *****2/18/2021 update: Bancorp (and Plaid, if you create an external link using the website) is out of the picture, as I can now link accounts external to Varo with micro-ACH deposits.*****
Second, I have never experienced such a level of incompetence/dereliction in staff and systems in a financial institution. Example #1: I received an automated email stating that I would begin to earn the lesser rate because I failed to meet the requirements of the higher rate. After I inquired as to which requirement, I received the normal automated email congratulating me on earning the higher rate. Two days later, a rep responded to my email, saying that my earned rate will be lower because I had kept my savings account balance under $10K. Can you believe that I had to tell him that that IS one of the three requirements for earning the higher rate?*****2/18/2021 update: Responses to email takes FOUR TO FIVE days and when you get a response, it often requires multiple exchanges where one or two is warranted.***** *****2/22/2021 update: Example #2: Varo replied to my 1099-INT inquiry with, "Tax forms are sent via USPS. Your 1099-INT tax form should arrive by February 14, 2021." The responder couldn't care less to notice that the 14th had come and gone.*****
Third, neither the checking ("Bank") or savings accounts can be jointly held (eg, by spouses). Another future feature, I was told. *****2/18/2021 update: No change.*****
Fourth, and critically important because of the previous point, there is no way to indicate one's beneficiary designation. *****2/18/2021 update: No change, despite the portal overhaul. Why not? Seems easy enough to implement.*****
Fifth, the web portal has limited function compared to the app. You can't transfer money; you have to use the app. The checking and savings balances match those shown in the app, but the transaction detail has a one-day lag so you have to use the app to see what hit the accounts. Speaking of their app, what kind of dev puts the logout function in Settings rather than on the main page? *****2/18/2021 update: You can now accomplish the same task either within the app or the website. Website access, however, now requires two-factor authentication via an access code over mobile. (It is annoying, and an overreaction.) Lastly, the app is now responsive and better designed.*****
Sixth, my brokerage rejected my attempt (in July) to create an ACH link because Varo/Bancorp could not be found in their universe of financial institutions. *****2/18/2021 update: I was initially unable to create a link to the newly chartered Varo accounts from another bank, but that was resolved after I requested that that bank update their ABA database.*****
Seventh, it goes without saying that, because Varo can't provide as basic a feature as joint accounts, they don't allow for an account held in a trust. *****2/18/2021 update: No change.*****
*****2/18/2021 update: Eighth, Varo removed, in the Fall of 2020, the ability to send paper checks to a third party. Since Varo doesn't have bill pay either, you cannot pay a third party (eg, government agency) that only accepts paper checks.*****
If you do decide to pursue an account with Varo, keep one eye open at all times and have lots and lots and lots of patience.
Don't Expect To Get Refunded If Hit By Theft
On February 27th, 2021, I made a $400 withdrawal at an allpoint ATM at a duane reade. Minutes after that transaction, I received a withdrawal notification for $503.00, $43, and another $43, each with a $2.50 atm fee.
I immediately tried to contact varo, but customer service was closed for the weekend. I sent them an email instead.
The following Monday I called to report the theft and was told that an investigation will take a few days. My current card was cancelled and a new card was being sent out as a result.
On March 5th, 2021, Varo replied to my claim :
"Based on our
investigation, we do not find that an error occurred. Therefore, no funds will be credited to your account as a result of your dispute and this matter is considered closed."
If you want your money to be safe, don't do business with this bank.
AWFUL Experience In Every Way
Deplorable customer service, call wait times exceed 1 hour. Representatives are not knowledgeable, Email responses take days. I wanted to transfer my funds and close my accounts and it is taking weeks. To close your account they want you to withdraw funds first but you can't. External transfer limit is $875 and by check is $5,000. They have to increase those limits by request but they refuse to. Closing the account is by request also and they refuse to do that as well. Filed my complaint with the FDIC and the Federal Reserve. This is a nightmare please steer clear.
Data as of Q4 2020
Health Grade Components
| Overall | |
|---|---|
| FDIC Certificate # | 59190 |
| Year Established | 2020 |
| Employees | 545 |
| Primary Regulator | OCC |
| Profit Margin | |
|---|---|
| Return on Assets - YTD | -19.65% |
| Return on Equity - YTD | -63.83% |
| Annual Interest Income | $270.00K |
| Assets and Liabilities | ||
|---|---|---|
| Assets | Q4 2020 | $515.1MM |
| Loans | Q4 2020 | $1.6MM |
| Deposits | Q4 2020 | $415.3MM |
| Equity Capital | Q4 2020 | $81.8MM |
| Loan Loss Allowance | Q4 2020 | $1.9MM |
| Unbacked Noncurrent Loans | Q4 2020 | $7.00K |
| Real Estate Owned | Q4 2020 | $0 |