Personal Finance

Chime vs Varo

Uncover the key features, pros and cons, and more about Chime and Varo in this side-by-side comparison.

Editor's Note

You can trust the integrity of our balanced, independent financial advice. We may, however, receive compensation from the issuers of some products mentioned in this article. Opinions are the author's alone. This content has not been provided by, reviewed, approved or endorsed by any advertiser, unless otherwise noted below.

Banking has changed dramatically in the last couple of years. No longer are we gravitating toward traditional brick-and-mortar banks. Instead, people want to access their money fast and on the go, using a mobile app experience that makes things seamless and transparent.

As more and more of these neo-banks come to the forefront, I want to call special attention to three of them.

In this Chime vs. Varo review, I will cover the key features, pros and cons, and other things to be aware of, for each of these banks so you can determine which, if any, are best for you.

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Chime

Chime is an excellent alternative to a traditional bank, and it’s exceptionally customer-focused.

Chime is a mobile-only financial app. Meaning, there are no physical locations and not much of a website to speak of. It's all done via an app. Chime also helps you avoid things like fees and overdrafts, saving you money and headaches.

Using Chime is a breeze. It offers an easy-to-use app so you can manage your finances.

When you sign up for a Chime account, you'll get a Spending Account (this is essentially a checking account) with a debit card and a savings account.

When you deposit money into your Chime account, it'll go directly to the Spending Account. From there, you can do a variety of things, including making purchases with the debit card (like a traditional bank), write paper checks (through the checkbook app), send money to others, and more.

You can also move money from your Spending Account to your Savings Account (either manually or automatically more on this below). You can also transfer money to other external accounts at no cost.

Chime Basic Features

Spending Account

The Chime Spending Account has no fees (and Chime is darn proud of that, as you can see in its marketing). There is no minimum balance required and no monthly maintenance fees on the account. So it really is free.

Another unique feature (though several others are starting to do this now) is the ability to get your paycheck up to two days early. All you need to do is set up a direct deposit and elect to receive your paycheck up to two days early. This is often when your employer actually deposits the money anyway.

And if your direct deposits total a minimum of $500 per month, you can sign up for SpotMe. SpotMe is optional and it allows you to overdraw your Spending Account by up to $20 without incurring any kind of fee.

For most conscious spenders, this is a non-issue, but sometimes it happens, and it’s nice to know this service backs you up. Plus, Chime can approve an allowance of up to $100 (instead of just $20) with good account history.

Lastly, for people who still need to use paper checks, Chime allows you to do that, too. Within the Chime app is a checkbook section that will enable you to generate and send a check to anyone. This is an excellent feature for paying rent, medical bills, or other people who want a paper check.

Savings Account

Like the Spending Account, there is no minimum balance requirement and no monthly maintenance fee. You just need $0.01 in your account to earn interest. One thing to note is that you can’t open a Chime Savings Account on its own. You have to have a Chime Spending Account first (they come as a package deal).

Chime also focuses on helping you save money faster and without hassle.

Chime offers what's called the "Save When You Spend" feature. When you make a purchase using your Chime Spending Account debit card, a small amount of money will go directly into your Savings Account. Chime just rounds the purchase up to the next nearest dollar and moves the difference into your Savings Account. For example, if you spend $6.58 on a Starbucks latte, Chime rounds the purchase up to $7 and deposits $0.42 into your Chime Savings Account. No, it's not a ton of money. But over time, you won't notice it dropping "loose change" into your Savings Account, and after a while, you'll have a fair savings balance.

In addition to getting paid when you spend, Chime has the "Save When I Get Paid" feature. This lets you set up a transfer of 10% of your direct deposit (assuming that deposit is at least $500) directly to your Savings Account whenever you're paid. For people who have trouble saving or waffle back and forth on how much to save, this is a neat feature.

Chime Special Features

Credit Builder

One of the more notable features of Chime is the Credit Builder secured credit card it offers. This is a relatively new addition to the Chime suite of offerings, and it's available without a credit check.

It works by using funds out of your Chime Spending Account. So if you're new to credit or rebuilding your credit, you're able to move money from your Spending Account to your Credit Builder card, then use the Credit Builder card to make purchases and build your credit history.

Best of all, Chime will report the payments you make to all three major credit reporting agencies. And on top of all that, there's no interest that's right, it's 0%. Now, you can only charge what you have money for, so I guess that makes sense.

Pay Friends

The other unique feature with chime is the Pay Friends system, which allows you to send free mobile payments to friends or family. There's a limit of $2,000 per month in transfers.

Chime Fees

What I like about Chime is that there are no fees. There are no overdraft fees, no monthly maintenance fees, no bounced check fees, and even no foreign transaction fees.

Chime does charge you $2.50 when you use an out-of-network ATM (but there are over 30,000 in-network ATMs) as well as a 3% debit charge if you load your account through debit transfer instead of direct transfer. But other than that, expect no fees.

And honestly, this is as close to a fee-free checking account as you will find. One of the things I have liked about Chime is its level of transparency.

Everything you sign up for has no fine print, as Chime is very member-focused. Chime wants to ensure all of its customers are happy, so you will not find any monthly fees.

Chime Pros and Cons

  • Limited options. It’s a breath of fresh air that Chime doesn’t have a ton of different options for opening up a checking account. This reduces decision fatigue as you don’t have to compare many different options before signing up for an account. They make it clean and straightforward with a lineup of free account options.

  • APY. The Chime savings account has a very competitive APY. As I mentioned before, the current APY as of this writing is 0.50%. Considering the options today, that is pretty good, especially for a free account.

  • Helpful tools. Within the Chime app, some savings tools help you save more money. The round-up feature will help you save extra money anytime you swipe your debit card. The automatic savings feature can immediately move 10% of your paycheck into a savings account. The Chime app is clean and clear and helps you have more visibility into your spending.

  • Get paid early. Chime was one of the first apps to offer the ability to get your paycheck early. This is a nice feature for those who set up direct deposit for at least $500 per month and qualify to receive their paycheck up to two days early. Note that some employers for paycheck systems will not be eligible.


  • No joint accounts. Currently, Chime does not offer the ability to open a joint account. Its FAQ section mentions it is working on this, but there is still not a solution. So if you are looking to open an account with someone else, you’re out of luck.

  • P2P payments are limited. The only way you can send money to someone else is if they have a Chime account too. At this time, you cannot send mobile payments to someone outside of the Chime family.

  • No branches. I’m guessing if you’re reading this review, you don’t care about physical branches, but sometimes it is nice to be able to see someone face-to-face when dealing with money. You won’t get that with Chime, as it is entirely digital.

Chime FAQs

Is Chime bank a real bank?

Chime is what’s considered a neo-bank. A neo-bank is a company that partners with an actual financial institution to provide FDIC insurance and back them up financially. This makes it safe for you to bank with Chime as if it were a traditional bank. Chime partners with two different banks to be able to offer its checking and savings accounts.

Is Chime free?

Yes, Chime is a free account. If you use an out-of-network ATM, you will get a charge of $2.50, but other than that, there are no overdraft fees, no foreign transaction fees, and no monthly maintenance fees.

Does Chime offer free ATMs?

Yes, Chime does offer free ATMs. It’s currently connected to over 38,000 ATMs that will not charge you a fee for withdrawing money. If you use an ATM outside of that network, you can be charged $2.50.

Does Chime have a debit card?

Every Chime Spending Account comes with a free debit card that you can use anywhere credit cards are accepted. You can also use this debit card to make purchases online and withdraw cash from an ATM.

Visit Chime or read the full Chime review

Varo

Varo is a mobile bank that was founded in 2015. Varo offers checking accounts, savings accounts, and a lending product. It also offers a virtual financial advisor that helps to create a budget, analyze your spending, and save more money.

Varo Basic Features

Bank Account and Savings Account

Varo offers both a bank account (checking) and a savings account. The savings account has an automatic savings tool that lets you save money without thinking, and there is no minimum balance required to open the account.

One of the best things about the savings account is the APY. To start, you can earn 0.40% APY, but you can earn up to 2.80% APY if you meet specific requirements. This includes making at least five qualifying Varo Bank Visa Debit Card purchases and receiving a total of $1,000 or more in qualifying direct deposits.

No Hidden Fees

Varo has no monthly fees or minimum balance fees. There are also no transfer fees and no foreign transaction fees. Also, there are no fees for using an ATM within its 55,000 ATM network, And there is no minimum balance requirement. Again, it doesn't charge fees on things like ACH bank transfers, account closing, OTC cash withdraws, or debit card replacements.

Early Direct Deposit

Just like the other two banks on this list, Varo allows you to access your paycheck up to two days early. So instead of them holding on to your money while they are waiting for payroll funds from your employer, Varo will immediately post the deposit to your account when they receive the file. Often, this is two days before your payday.

Varo Special Features

Varo Advance

Varo Advance gives you immediate access to up to $100 cash through the Varo Bank app. So if you are stretched a little thin until payday, or you have an emergency, you can use this feature to get cash instantly. The only catch is you can only use an advance once.

Related: Best Cash Advance Apps

Partner Offers

Varo wants to help you manage your entire financial situation. So, it works with partners to help you find things that you need, often at a reduced cost. The four categories it has partnerships with are Smart Insurance, Credit, Jobs, and Smart Savings. So if you need insurance coverage, or you’re looking for a job, or you need to build your credit back, Varo can help you with that.

Resources

Varo offers some additional resources on its website, such as a blog and a savings calculator. While this isn't earth-shattering, it's something that traditional banks don't typically have, and the blog is pretty good. It's also regularly updated with some valuable information.

Varo Fees

Varo does not charge a monthly fee or minimum balance fee. And if you use an ATM within its network, there is no fee to withdraw cash. If you do withdraw some money out of the ATM that is not in its network, Varo will charge you $2.50.

If you want to deposit cash, you will have to do it with a retailer that works within the Green Dot network, like CVS or Walgreens, or you can deposit checks through the Varo Bank app.

Right now, there are no fees for Varo advance. Beginning February 1, 2021, however, there will be a small fee, ranging from $0 to $5, depending on the amount that you need.

Varo Pros and Cons

  • Competitive APY. The annual percentage yield on a Varo savings account is competitive at 0.40%. And if you make meet the additional criteria, you can earn as much as 2.80% APY.

  • Instant cash. You can access $100 instantly when you are in a pinch which is an excellent benefit to have. Hopefully won’t ever need to use that feature, but it’s a nice one to have for an emergency.

  • No fees. Neither the checking nor savings account with Varo have monthly fees, overdraft fees, ATM fees, foreign transaction fees, debit card replacement fees, or transfer fees.

  • Overdraft protection. If you overdraw your account by up to $50, there is no fee. You can just pay the overdraft with your next deposit within 30 days.

  • Large ATM network. Varo is part of the Allpoint ATM network. This has 55,000 ATMs across the world, so you will be hard-pressed to find an ATM you can’t get cash out of for free.


  • No paper checks. Unlike Chime, Varo does not allow you to send paper checks through its app or a physical checkbook.

Varo FAQs

Is Varo a real bank?

Varo is a neo-bank, which is a company that is financially supported by another bank. This gives you FDIC insurance, so your balance is completely protected. So, Varo is a real bank.

What bank does Varo use?

Bancorp Bank financially supports Varo. Bancorp provides all account services and FDIC insurance up to $250,000 on your deposits with Varo.

How does Varo Bank make money?

Right now, Varo makes money from the interchange, which is a small percentage given to the debit card provider when the card is used, and interest income from loans (i.e., those who do not pay their instant cash back on time).

How much can I withdraw from Varo?

If you withdraw cash out of an ATM, the maximum is $750 per calendar day. If you are using your debit card at an in-person merchant, you can get up to $500 cash back.

Chime vs. Varo: A Comparison

BrandBest ForSpecial Feature
ChimeMost peopleCan round up purchases and put the difference into savings
VaroSavings APYExcellent savings APY when you meet the requirements

Bottom Line

Personally, I think all three of these banks have something to offer for the right person.

For most people, I highly recommend Chime. It has been around for a while and offers a bunch of features with no fees.

If you were looking simply for a great savings rate and a checking account that is free, Varo is your best bet.

Chime SpotMe® Disclosure - Eligibility requirements and overdraft limits apply. 

Chime Disclosure - Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank or Stride Bank, N.A.; Members FDIC.

1Chime cannot guarantee when files are sent by the IRS and funds can be made available.

^Early access to direct deposit funds depends on payer 

Chime APY Disclosure - 1The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of November 1, 2021. No minimum balance required. Must have $0.01 in savings to earn interest. 2The average national savings account interest rate of 0.06% is determined by FDIC as of November 1, 2021 based on a simple average of rates paid (uses annual percentage yield) by all insured depository institutions and branches for which data are available. Visit https://www.fdic.gov/regulations/resources/rates/ to learn more.


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