Varo Bank

Is Varo Bank safe?

For balances under $250,000, your money is protected. Varo Bank, N.A. is an FDIC-insuredDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary national bank, so deposit insurance applies directly, without the partner-bank records that Chime users depend on. The risk sits with the bank itself. Varo lost $91.8 million in 2025 and $46.6 million in the first half of 2026, its balance-sheet deposits have shrunk to about $210 million, and its equity is kept up by fresh investor money. We score it 60/100, just above N26 at 58.

A charter, not a partner bank

Most US money apps are not banks. Varo is. After a three-year application that cost close to $100 million, the OCC gave Varo final approval in July 2020, making it the first consumer fintech with a full national bank charter. The FDICDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary insured it on stricter terms than an ordinary new bank: at least $104.4 million of starting capital, a Tier 1 leverage ratioLeverage ratioA bank's Tier 1 capital divided by its total exposures, without adjusting for risk. It is a simple backstop to risk-based capital rules.More in the glossary of 10% or more for the first three years, and no dividends without permission.

That structure matters for you as a depositor:

	Varo	Chime
Who holds your money	Varo Bank, N.A.	The Bancorp Bank or Stride Bank
FDIC cover	Direct, $250,000	Pass-through, $250,000 per partner bank
Depends on app's records?	No	Yes
Supervisor	OCC, Federal Reserve (parent)	Partner banks' supervisors

Losses and capital

Varo is small and still losing money. The FDICDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary's quarterly call report data show the pattern:

Quarter end	Total assets	Deposits	Equity	Leverage ratioLeverage ratioA bank's Tier 1 capital divided by its total exposures, without adjusting for risk. It is a simple backstop to risk-based capital rules.More in the glossary	Net loss, year to date
March 2024	$533m	$379m	$100m	21.6%	$16.3m
December 2024	$448m	$337m	$60m	14.5%	$65.0m
December 2025	$376m	$211m	$95m	32.3%	$91.8m
June 2026	$338m	$210m	$69m	18.5%	$46.6m

The ratio swings because capital arrives in steps. Losses eat about $20 million to $25 million of equity a quarter, and the parent company tops it up after each funding round. The most recent was a $123.9 million round in February 2026 led by Warburg Pincus and Coliseum Capital. Between March and June 2026 equity fell by about $23 million with no new injection.

An 18.5% leverage ratio is high for a bank, about double the 9% threshold of the simplified community bank framework Varo reports under. Yet at the current loss rate, that cushion would last only a few quarters without new money. That is why we score capital at 40 despite the headline ratio. Varo has no credit rating.

Liquidity and deposits

The balance sheet is simple. About a quarter of assets are loans, mainly small consumer credit products, and the rest is cash and securities. Nearly all deposits are insured: only $3.6 million of $210 million was above the FDICDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary limit in June 2026, so a run by large depositors is not the main risk.

The worry is the trend. On-balance-sheet deposits fell by about 45% between March 2024 and June 2026. Varo told Banking Dive that $150 million more was swept to other banks at the end of 2025. If your money is swept, ask which bank holds it, because the $250,000 limit then applies at that bank.

Conduct and security

We found no public enforcement action by the OCC, the Federal Reserve or the CFPB against Varo Bank. That is a better regulatory record than N26 or Chime. As an app-only bank, Varo has no branches, so access to your money depends on the app and phone support. Complaints about app banks generally concern accounts frozen during fraud checks.

How to use Varo safely

• Keep your Varo balance well under $250,000, and count any other accounts you hold at Varo Bank, N.A. toward the same limit.
• If Varo sweeps part of your savings to another bank, check the name in your account documents and add any money you already hold there.
• Keep a second account elsewhere with a few weeks of bills, in case your Varo account is frozen for a review.
• Cash advances and credit lines are loans, not deposits; FDICDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary insurance does not apply to them.

How we scored it

Deposit protectionDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary (80) is Varo's strongest factor, because the cover is direct and nearly every dollar is insured. Capital (40) and stability (40) are the weakest: a bank that loses about $90 million a year on $338 million of assets depends on investors to stay above its minimums. Varo ranks just above N26 and below Chime at 62, whose partner banks are larger and profitable.