Varo Bank launches high-yield savings account

Varo offers consumers a high-yield savings account with an annual percentage yield (APY) of 1.20%. However, that could be increased to 5% for consumers who meet certain criteria. To qualify for the 5% APY, consumers must have USD 1.000 or more in direct deposits from paychecks, pensions, or government benefits like Social Security and unemployment.

Consumers will need an account balance greater than or equal to USD 0 at the end of the qualifying period and not have more than USD 5.000 in their Varo Savings Account at the close of business each business day during a calendar month.

Consumers have to maintain all three criteria during the qualifying period, which runs from the first calendar day of the month to the last. Prior to qualifying for the 5% rate, consumers will earn 1.20%. Varo has a federal banking charter. That means it doesn't have to rely on a third-party banking partner and instead is directly regulated and supervised by national regulators.