This Little-Known Savings Account Pays More Than 2% APY on Your Balance

Choosing a bank account can feel like a big decision.

It seems like each day, you see new headlines about banking scandals. You want to stay far away from that mess. A bank is where you keep your hard-earned dollars, after all, and you want to feel good about your choice.

So maybe it’s time to step away from the obvious choices and look into something you haven’t heard of. Yet.

You Probably Haven’t Heard of This Account

Have you heard of Varo?

It’s one of our best-kept — err, now shared — secrets.

Varo is a mobile-only bank account that operates through an easy-to-use iOS app. It combines the traditional banking tools you rely on with modern technology to help you become financially healthy.

But here’s why we really like it: Pair your Bank Account with a Varo Savings Account where you’ll earn 2.12%* Annual Percentage Yield (APY) with the opportunity to earn up to 2.80% APY on up to $50,000 in savings.

To qualify for the 2.80% rate, each month you’ll need to have monthly payroll or government direct deposits of $1,000 or more and authorize at least five purchases with your Varo debit card.

If that 2.8% APY doesn’t mean much to you, this might: That rate is 28 times — repeat, 28 times — the average savings account, based on a 0.10% average reported by the FDIC.

Sooo… there’s a catch, right? Some insanely high fees? Nope!

Varo goes easy on the fees. As long as you use one of the more than 55,000 Allpoint® ATMs in its affiliated network across the world, you won’t pay ATM fees.

Additionally, the minimum balance to earn interest in the savings account is just a penny; you’ll pay no monthly service fees, no minimum balance fees, no foreign transaction fees and no cash replacement fees. You’ll just pay any fees charged by out-of-network ATMs and cash deposit fees if you deposit cash in-store through the Green Dot® Network.

Sign up to Help Your Money Grow

OK, that was a lot of information, so here’s a quick rundown:

  • When you download the Varo app, you’ll sign up and gain access to a banking and savings account. You’ll now manage your money with the tap of your thumb.
  • All you need to earn interest on a savings account? One penny.
  • You won’t get hit with any sneaky fees.
  • Your savings account lets you tap into some powerful compound interest — way above the average national rates.

Interested in signing up? Download the Varo Money app, create a profile, complete the five-minute application and start enjoying that sweet, sweet earned interest!

*APY is accurate as of April 1, 2019. This rate is variable and may change. No minimum balance required to open account. Balance in savings must be at least $0.01 to earn interest. Deposits are FDIC insured to at least $250,000 through The Bancorp Bank; Member FDIC.

Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder. She gets all nerdy and excited when reviewing bank accounts.

This article originally appeared on The Penny Hoarder