What is the difference between an interest rate and APY?

Your interest rate is the base percentage a bank pays you on your balance annually. It’s a simple interest rate, meaning the interest earned is based solely on the money you deposit. Annual percentage yield (APY) takes it a step further by accounting for your compounding frequency as well. Because Varo features monthly compounding, your APY reflects your total interest earnings potential including the money you earn on top of your earned interest.

How long does it take to transfer funds online?

Internal transfers between your Varo Bank Account and your Savings Account happen instantly on our online banking platform. For external transfers from another institution into your Varo account, it typically takes 1 to 3 business days for the deposit to clear.

Is my money safe with an online banking platform?

Absolutely. Varo is a fully regulated bank, meaning your money comes with built-in deposit protection coverage. All federally insured deposits are FDIC insured up to $250,000, ensuring your hard-earned money earns risk-free returns.

Why do high-yield savings rates occasionally change?

Varo Bank, like many other institutions, bases our savings rates on market conditions and changes made by the Federal Reserve. When the Fed shifts its target ranges, banks across the country adjust their rates accordingly. We aim to always provide a top-tier return that drastically outperforms traditional banks.

What is a high-yield savings account (HYSA)?

A high yield savings account is a specific type of savings deposit engineered to earn a significantly higher interest rate than standard checking or traditional savings options. At Varo, we offer competitive interest rates to help maximize your interest earnings potential, making it a foundational pillar of a smart savings growth strategy.

High Yield Savings Account

Q: What are the qualifications to earn the highest APY tier?

It’s simple to unlock our top-tier rate. Just open a Varo Bank Account, receive qualifying direct deposits of at least $1,000 within the calendar month, and ensure both your bank and savings accounts maintain a positive balance at the end of the month.

Q: Can I keep earning rewards on balances over $5,000?

Yes. While our highest HYSA tier pays out on balances up to $5,000, any funds sitting above that threshold still earn a steady, reliable interest rate of 1.00%—nearly 3x the national average. At Varo, your entire balance is always working for you.

Q: How does compounding interest work on my account?

Your account earns compounding interest, meaning you earn interest on both your initial balance plus the interest you’ve already accumulated. Our compounding frequency is monthly, so your money automatically starts multiplying on its own every single month.

Q: Can I easily withdraw my money whenever I need it?

Yes. We design our products to prioritize liquidity and accessibility. You can move money between your Varo accounts instantly to pay bills or handle unexpected expenses, ensuring you maintain full control over your cash while working toward your savings goals. We also offer free cash withdrawals at any of our 40,000+ in-network ATMs nationwide.

Get up to 3.75% APY.

Qualify to earn 3.75% Annual Percentage Yield (APY) on up to $5,000¹
Competitive interest rates, 9x the national average for savings accounts²
1.00% APY on balances over $5,000

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GET UP TO 3.75% APY •

Competitive interest rates

Why savers choose Varo.

Whether you’re building an emergency fund or saving for what’s next, Varo’s Savings Account helps you get there faster. It’s that simple.

HYSA features

Most traditional banks

Varo

3.75% APY

No monthly fees

No minimum balance

Automatic saving tools

Banking and high-yield savings in one place

How to qualify for 3.75% APY.

varo phone screen - open a varo savings account

Step 1

Open a Varo Bank Account and Savings Account.

varo phone screen - 3.75% APY savings rate tracker

Step 2

Receive deposits of at least $1,000³ and keep accounts positive by the end of each month.⁴

varo phone screen - savings account balance earned $18

Step 3

Watch your savings grow!

Trusted by thousands on Trustpilot.⁵

“I am excited about the yield on the savings account, it is one of the best I’ve found.”

C. Bennett

“Great savings options that actually help you grow your money.”

Anthony J.

“Varo is a great app because it’s very easy to use, it’s safe, and it’s a great saving app.”

Krystal T.

“I like having the round ups that go into my savings account. It adds up quickly.”

Nicole B.

Auto-saving tools

A convenient way to hit your savings goals.

Don’t want to think about it? With Save Your Change and Save Your Pay®, you can automatically round up your change and sets aside a portion of your paycheck.

woman putting purple varo debit card into jean jacket pocket no face

blue purple speckle bg background texture

Better money management

Always free, always safe.

Your hard-earned money is yours, and we want to keep it that way. That’s why our savings account is 100% free with no hidden fees¹ and FDIC-insured up to $250,000.

Save more. Like, a lot more.

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High yield savings FAQs

How does Varo's interest rate compare to the national average?

What are the qualifications to earn the highest APY tier?

Can I keep earning rewards on balances over $5,000?

How does compounding interest work on my account?

Can I easily withdraw my money whenever I need it?

Answer

Traditional banks often offer rates close to the baseline national average. As of July 8, 2026, the national average savings rate is 0.38% according to the FDIC. This barely moves the needle. Varo gives qualifying customers a way to earn an annual percentage yield (APY) of 3.75% on their first $5,000 and 1.00% on all remaining balances. This easily beats legacy options.