Varo Bank made history in 2020 as the first consumer fintech to receive a national bank charter from the OCC. Colin Walsh, a veteran of American Express and Lloyds Banking Group, founded the company in 2015. Getting a full banking charter — rather than partnering with an existing bank — was a grueling multi-year regulatory process that most neobanks avoid entirely.
The charter matters because it means Varo holds deposits directly, can lend its own money, and doesn’t share economics with a partner bank. This gives Varo better unit economics long-term and more control over the customer experience. Deposits are FDIC-insured up to $250,000 directly by Varo, not through an intermediary.
Varo’s product targets Americans who are underserved by traditional banks. The checking account has no minimum balance, no monthly fees, and no overdraft fees. Varo Advance provides small short-term cash advances up to $250 with no interest, funded by upcoming direct deposits. Early direct deposit — getting paychecks up to two days before payday — rounds out the core offering.
The savings account offers a competitive APY for users who meet direct deposit requirements. Varo Believe is a secured credit card designed to help users build credit, similar to Chime’s Credit Builder card. Users deposit funds as collateral and Varo reports activity to all three credit bureaus.
Varo has raised over $1 billion in funding from investors including Warburg Pincus, The Rise Fund, and Gallatin Point Capital. The company serves millions of customers, primarily in demographics that traditional banks have historically ignored or penalized with fees.
