Varo Money wants you to save big this year.
The mobile bank announced today it’ll be raising the annual percentage yield on its savings account to a whopping 2.8percent APY, one of the highest yields available.
While the savings rate is hefty, it comes with a few caveats.
Account details: High APY if you meet certain criteria
The 2.8 percent APY is offered to Varo Money customers who have savings balances of $50,000 or less and have direct deposits totaling at least $1,000 each month into the Varo bank account. Additionally, customers must use their Varo debit cards to make at least five purchases each month.
The account has no required minimum balance and doesn’t charge fees, and is insured by the Federal Deposit Insurance Corp.
Customers who don’t meet the requirements will earn a 2.12 percent APY, well above the national average of 0.1 percent APY but below many of the top savings account yields available.
A recent Bankrate survey found that only 40 percent of Americans could pay an unexpected $1,000 expense. The hefty savings rate could be a great incentive to those looking to start building their savings. Conversely, those already struggling to save likely would find a $1,000 monthly deposit to be a bit of a stretch.
Varo Money co-founder and CEO Colin Walsh cited the “serious saving problem” in America to be a driving factor of why the company is offering the high savings rate.
“Four in 10 Americans can’t cover a $400 surprise expense without selling something or going into debt, and the typical working-age household has only $3,000 in retirement assets,” Walsh says. “Varo is on a mission to help improve people’s financial well-being and we’re proud to put a stake in the ground with a market-leading rate for FDIC-insured accounts.”
Varo, founded in 2015, is one of the fastest growing mobile banks in the country and offers services through The Bancorp Bank. Varo offers no-fee banking services and is considered one of the top personal finance apps.