Varo Money Helps Americans Improve Financial Health With High‑Yield Savings Accounts and SMS Alerts

Varo is also announcing a new product feature, SMS Alerts, which make it easier for customers to track their spending and see where their money is going. The company built this feature in response to survey findings that show too many Americans—and millennials in particular—need help with their overall financial health, both to build emergency savings and to avoid a perpetual state of stress about money.

This update comes just two months after Varo closed a $45M Series B funding round led by Warburg Pincus and The Rise Fund, a global impact fund led by private equity firm TPG.

“As a company, we are extremely motivated by our mission of improving consumer financial health,” said Colin Walsh, co-founder and CEO of Varo Money. “A bank account shouldn’t just be a place that holds your money—Americans deserve a bank account that actively helps them achieve their financial goals. By providing alert capabilities and increasing the rate on savings accounts, Varo is helping customers accomplish that very thing.”

Many Americans Are Struggling to Achieve Good Financial Health

A recent survey of more than 1,000 U.S. adults age 18+, conducted by Propeller Insights on behalf of Varo Money, determined that 85 percent of American adults sometimes feel stressed out about money, and a full 30 percent feel stressed out about money constantly.

● About 1 in 5 Americans (19 percent) are living paycheck to paycheck
● More than two-thirds of Americans (69 percent) report having had to dip into their savings to make it to the next payday at least once in the past two years
● 55 percent of millennials have dipped into their savings in the past few months
● About a third (31 percent) of millennials understand what their finances will look like from month to month only “somewhat” or “not at all”

According to the survey findings, two-thirds (66 percent) of American adults—including 71 percent of millennials—do not have a three-month emergency fund, and almost half (46 percent) don’t have any savings set aside for unexpected expenses. Certain events would throw these Americans into financial chaos, particularly job loss (36 percent), personal injury (35 percent), car trouble (33 percent), and even a pet care emergency (18 percent).

Helping Customers to Make More From Their Money

Varo is using mobile technology and intuitive design to change the future of banking. It offers customers a convenient all-mobile bank account through The Bancorp Bank that’s designed to help them get ahead financially by featuring integrated banking and savings. Varo also offers lending products to qualified customers to help smooth cash flow and build savings—all from their phones.

Varo’s 1.25% APY Savings Accounts have no fees or minimum balances and offer a rate that is more than 60x the average rate offered by the top 5 largest national banks. According to mybanktracker.com, the top 5 largest national banks offer an average of 0.02% APY, and many traditional bank savings accounts have a minimum balance requirement or fees.

Varo’s two new features are part of its continued expansion of features and focus on financial health for Varo customers:

● 1.25% APY Savings Account: All Varo customers can easily apply for an online savings account with a few taps through the Varo app and receive a rate of 1.25% APY.* Customers can access funds 24/7 and easily transfer money from their Varo Bank Account into their Varo Savings Account. There are no fees or minimum balances required to open or maintain the Savings Account. The Savings Account balance must be at least $.01 to earn interest.
● SMS Alerts: Customers can receive notifications based on aggregated financial activity across all linked accounts that let them know how they’re doing on income and saving and if they are at risk of overspending so they can stay on top of their money effortlessly. Standard text messaging and/or data rates from the wireless service provider may apply.

Varo’s digital model eliminates the fees that traditional banks often charge, such as minimum balance fees and foreign transaction fees. In addition, Varo does not charge ATM fees at a network of more than 55,000 Allpoint ATMs worldwide. Allpoint ATMs are located in popular retail stores—like Target, Costco, Walgreens, and CVS—so customers don’t have to go out of their way to get cash at a bank branch ATM.

*Varo’s Savings interest rate is variable and may change. The balance in savings must be at least $0.01 to earn interest. The APY disclosed is accurate as of March 6, 2018.
**APYs for other banks provided by mybanktracker.com.