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Varo vs. Chime: Which Is Better for You?
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Varo vs. Chime: Which Is Better for You?
Varo and Chime both have high rates of interest on savings accounts, however their services and products have a few different features.
By Chanelle Bessette Banking, checking and Cash Management Accounts Chanelle Bessette is a personal finance writer for NerdWallet that covers banking. She previously worked at Fortune, Forbes and the Reno Gazette-Journal. She is also a spokesperson for the banking team, and her expertise has been published in The New York Times, Vox and Apartment Therapy.
Updated May 6, 2022
Edited by Sara Clarke Assistant Assigning Editor | Banking Sara Clarke is a Banking editor at NerdWallet. She was an editor and project manager in newsrooms for over two years, including most recently working for U.S. News & World Report. She was responsible for projects such as The U.S. News education rankings as well as the Best States rankings. Sara has appeared in SiriusXM Business Radio and iHeartMedia's WHO Newsradio and has been quoted in The Salt Lake Tribune, The St. Paul (Minnesota) Pioneer Press and other publications. She lives close to Washington, D.C.
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Varo and Chime have comparable offerings with some key differences. Varo has a function as a bank and Chime is a neobank -- an online-only financial service firm that works with a bank in order to offer account insurance.
The two firms compare to one another.
Snapshot comparison
Checking your account
There is no monthly maintenance charge or minimum balance requirement to either Varo or Chime.
Varo Chime and Varo Chime both have direct deposits that are early (up two days earlier).
The cash deposits offered at Varo and Chime may be expensive however the cash deposit from Walgreens are free when you use Chime.
Savings account
With Varo customers, they are able to earn 5.00% annual percentage yield on balances up to $5,000 if certain conditions are met. Customers can also earn 3.00% APY without meeting those conditions or for balances of more than $5,000.
Chime offers 2.00% APY for its high Yield Savings account.
ATMs, Overdrafts, and customer service
Chime's SpotMe(r) overdraft service allows customers to extend their credit up to $200 at no charge if they meet specific requirements for their accounts.
Varo doesn't permit overdrafts however, it does have a cash advance program.
Varo customers have access to more than 55,000 cost-free Allpoint ATMs.
Chime customers can access more than 60,000 fee-free MoneyPass, Allpoint and Visa Plus Alliance ATMs.
Varo Chime and Varo Chime are both online-only and do not have branches.
Varo and Chime both have excellent mobile app ratings.
Choose Varo if:
You want a stellar interest rate on savings , and can meet the requirements to reach that goal.
Choose Chime if:
You're looking for a high rate of interest on savings, and an overdraft option that is flexible.
Checking
NerdWallet's ratings are determined by our editorial team. The scoring formulas are based on many data points for each financial product and service.
at Varo Bank, Member FDIC
Varo Bank Account. This Varo Bank Account has no fees for monthly or minimum balance requirements. In addition, customers can access The Allpoint ATM network, that has more than 55,000 ATMs for free which allow customers to take cash withdrawals. However, cash deposits are more complicated; Varo customers must visit the Green Dot retailer such as Walgreens or Safeway and could be charged a fee that can be as high as $5.95. Customers are also able to receive their paychecks as much as two days early by direct deposits.
NerdWallet's ratings are made through our team of editors. The scoring formulas consider several data points associated with every financial product or service.
Chime Savings Account. Chime does not charge monthly fees or require a minimum amount in its spending account. It also has a savings program where customers can round up each purchase to the nearest cent and save the difference. Additionally, Chime customers can make fee-free withdrawals at more than 60,000 ATMs in the United States. Chime belongs to the Green Dot network, so customers can cash-in at specific retailers for a small fee, or at Walgreens at no cost.
See more information from Chime
(image: https://universityinnovation.org/images/e/ed/Mitchell_Scott.jpeg)Chime claims: "The retailer that receives the cash is responsible for transferring the funds to Chime Checking Account. Chime checking Account. The fees for cash deposit may apply for retailers other than Walgreens."
"Round Ups automatically round up debit card purchases to the nearest dollar. Then, transfer the round up to your Chime checking account to your savings."
"Early availability of direct deposit money depends on the timing of the submission of the payment file by the payee. We typically make the funds accessible on the same day that we receive the payee's payment form which may be up to two days prior to the date for the scheduled payment."
"Out-of-network ATM withdrawal charges may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM."
Savings
Varo Savings Account. The account starts at a minimum of 3.00 percent APY, however they are able to earn 5.00 percent on up to $5,000 if they have $1,000 or more in direct deposit per month, and have the positive balance of their account balance in their checking (Varo Bank Account) and savings balance at the close each month. Varo has two automatic savings programs. The first lets customers withdraw an amount of direct deposits in their checking account and then transfer it to their savings. Another program allows customers to earn savings upon making purchases. Varo will round up your purchase to the nearest dollar, and put the difference to an account for savings.
Chime High Yield Savings. Chime's savings account is free and offers an 2.00% APY , as it has an account balance of at minimum $0.01. Chime also offers two automatic savings programs: a roundup programme for purchases made using an account debit card for checking accounts and a program that will save 10% of direct deposits of $500 or more from your checking account into the savings accounts. Be aware that a Chime Checking Account is necessary to qualify for savings Account.
Find out more details from Chime
Chime declares: " The Annual Percentage Yield ("APY") for Chime Savings Account Chime Savings Account is variable and may change at any time. The stated APY will be in effect from October 25, 2022. There is no minimum balance to be met. It is necessary to be able to keep $0.01 in savings to earn interest. "
"There's no cost for the Chime Savings Account. Cash withdrawal fees and Third-party fees could apply to Chime Checking Accounts. You need an existing Chime checking Account to create a Chime Savings Account."
Experience with banking
Varo Chime and Varo Chime are online-only, which means that you're not able to use them if prefer in-person support. The good news is that Varo provides extended weekends and weeksdays phone support hours and ways to contact customer service via email and Twitter and Chime can be reached via chat, email and telephone 24/7, as well as on Twitter.
Varo and Chime also have very high mobile app ratings in their Google Play and App Store marketplaces.
Overdrafts
Varo. Varo does not allow overdrafts to occur When a customer wants to perform a transaction which would create a negative balance in their account, then Varo declines the transaction. If you're looking for some breathing room between paychecks then you can take advantage of Varo Advance. Varo Advance program, which lets you get cash advances of up to $100 for an amount of $5.
Chime. Chime doesn't charge overdraft fees. Instead, it has an overdraft program called SpotMe(r) that allows customers can make overdrafts up to $200 if they deposit at 200 direct deposits every month.
Find out more details from Chime
Chime states: "Chime is a financial technology company, not a bank. Services for banking are provided through The Bancorp Bank, N.A. and Stride Bank, N.A., Members FDIC."
"Chime SpotMe is an optional service that requires a single deposit of $200 or more in qualifying direct deposits to Chime Checking Account. Chime Checking Account each month. All qualifying members will be allowed to overdraw their account to the amount of $20 on debit card purchases and cash withdrawals in the beginning but they could be qualified for a greater limit that can be $200 or more based upon the members' Chime Account past history as well as the frequency of direct deposits and amount, spending activity as well as other risk-related variables. The limit you have set will be shown to you in the Chime mobile app. You will be notified of any changes regarding your allowance. Limits can change at any point, at Chime's discretion. Although there are no overdraft fees, there may be out-of network or third-party fees that are associated in ATM transactions. SpotMe does not cover non-debit-card transactions, which includes ACH transfers and Pay Anyone transfers and Chime Checkbook transactions. Check out the Terms and Conditions."
About the author: Chanelle Bessette is a personal finance writer for NerdWallet that covers banking. She specializes in cash management and checking accounts.
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