Varo vs Chime: Which is better in 2022?

0

Brainsil/Getty Images/iStockphoto

Do you manage your bank account via a mobile banking app? Varo and Chime are two online options that can help you move away from bank branches. Their online applications also make banking services more accessible with round-the-clock availability that is not tied to branches.

All you need to do is open the mobile app on your smartphone to manage your accounts, with both checking and savings service offerings and more.

A preview of Varo vs. Chime

As mobile apps, Varo and Chime are relatively simple, but Varo and Chime are simple mobile apps. These applications allow you to consult your current and savings accounts from your smartphone.

These offer many similar features and options, which aim to simplify banking and financial management for you. This way, you don’t have to go to traditional banks.

Chime offers no-frills accounts with features that simplify money management and saving.

In contrast, Varo offers free checking accounts with no minimum balance. It also offers a high-yield savings account, no bank fees and an exceptional banking experience.

Varo’s customer service is excellent, with a 4.7 out of 5 star rating on Google Play.

What is the chime?

Chime can help you reach your savings goals by offering free online savings and spending accounts. Unlike Varo, however, it’s not a bank, but a fintech company that provides a host of services designed to be simple and cost-effective for consumers.

The app has built-in features such as automatic savings, no-fee overdraft protection, ATM networks and more. Chime has gained popularity for providing many free services. If there are fees, they are relatively low – you only have to pay $2.50 for out-of-network transactions.

What is Varo?

In the United States, Varo was the first online banking app to gain full banking charter approval. As a result, Varo has a banking status in its own right, unlike other banking apps associated with national banks.

Is Varo a good bank?

Well, it certainly offers a great suite of various financial services.

These banking services include cash advance loans and credit programs. Additionally, it offers Varo Advance, which is an optional overdraft protection feature.

It also offers free ATM transactions, which is not surprising since most of the banking services offered by Varo are free. You only have to pay Varo $2.50 if you use third-party ATMs.

What are the similarities between Chime and Varo?

Varo and Chime offer very similar services, and for this reason, it can be difficult to know which is the best option. If you’re wondering if Varo is better than Chime, here’s a detailed comparison.

Both Varo and Chime offer an optional debit account and savings account without charging a monthly fee. Additionally, they both simplify the banking process by using auto-savings tools, which automatically create a savings account.

When you transfer money to your checking account, an adjustable percentage can be automatically transferred to the savings account. Chime and Varo both offer high yield savings.

Paid accounts

Chime offers users a 0.50% APY on their savings with no balance condition.

In contrast, Varo offers a variable APY of 0.50% for 3.00%; you will need at least $0.01 to earn this interest. To get the highest interest rate, you’ll need to meet certain requirements, one of which is setting up direct deposits of $1,000 or more each month.

Advance direct deposit

Similar to many other online banks, Varo and Chime get your paycheck two days early when paying by direct deposit. When your employer processes payroll, the money becomes available two days before your scheduled payday.

On top of that, both banking apps allow you to deposit money from over 90,000 outlets through Green Dot.

Bill payment and money transfer

Varo and Chime also allow you to pay your bills by ACH transfer. Another advantage of these online banking apps is that you can instantly send money to other accounts without paying bank fees.

The instant money transfer saves you from going to a traditional bank branch. Since these companies provide FDIC-insured accounts, banking is safe. Chime has partnered with The Bancorp Bank for FDIC support while Valo Bank backs Varo Money.

What are the differences between Varo and Chime?

The main difference between the two banking companies is that Varo has a “Save Your Pay” rule. It allows you to set aside a fixed percentage of your salary. The bank lets you decide the percentage.

Contrary to this, Chime only offers a static saving of 10% on the “Save when you get paid” plan.

Which is better: Varo or Chime?

Since Varo and Chime offer similar functionality, you may want an account with either company. But before making your decision, you should review their features.

Free Accounts

Both companies offer free checking and savings accounts. Additionally, you can fund the account through direct deposits or money transfers from external bank accounts.

These companies do not require you to pay monthly maintenance fees or bank charges. You can also get advance paychecks through these apps. Visa card requirements and options are also very similar.

savings plan

A significant difference between the two companies is the savings plan. While Varo lets you choose a percentage of your deposits to set aside in savings, Chime only lets you set aside 10% automatically. Of course, you can still manually transfer money from your Chime checking account to your savings account, so that’s just a slight convenience.

Interest rate

Although Varo is virtually identical to Chime, it offers better interest rates for balances below $5,000. With this difference in mind, you can make your decision based on your savings plan.

Are there better banks than Chime or Varo?

Chime and Varo do not use ChexSystems, which many traditional banks use. These systems determine if you qualify for a bank account.

Since none of these companies use ChexSystem, having a bad banking history will not prevent you from banking with Chime or Varo.

Product offers

Varo and Chime do not offer joint accounts or financial products such as car loans, personal loans or mortgages. They also do not offer paper checks.

Other banks to consider

If you want to access these financial services, there are great alternatives in Chime and Varo. These include Axos Bank, Quontic Bank and Ally Bank. These competitors offer awesome in-demand features with great rewards for online banking.

Chime is a fintech company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, NA; FDIC members.

About the Author

Scott Jeffries is a seasoned technology professional based in Florida. He writes on the topics of business, technology, digital marketing, and personal finance.

After earning his bachelor’s degree in management information systems with a minor in business, Scott spent 15 years working in technology. He has helped startups to Fortune 100 companies bring software products to life. When he’s not writing or building software, Scott can be found reading or spending time outdoors with his children.

Share.

Comments are closed.