Varo Bank CD Alternatives Review (2026) — Where to Get Yield Since Varo Doesn't Offer CDs
Quick take: Varo is unusual: it's a real FDIC-chartered bank (charter granted July 2020) AND a mobile-first fintech. But Varo does NOT offer CDs — only Varo Savings (tiered up to 5.00% APY on first $5,000). For larger balances or locked rates, Varo customers need to go elsewhere. This guide ranks the best alternatives.
Current rates (Varo Bank, as of June 2026)
| Term | APY | Minimum |
|---|---|---|
| Varo Savings tier 1 (first $5K with qualifying activity) | 5.00% APY | $0 |
| Varo Savings tier 2 (balance above $5K) | 2.50% APY | $0 |
| Alternative: Marcus Online Savings (no balance cap) | ~3.85% APY variable | $0 |
| Alternative: Ally 11-Month No-Penalty CD | ~4.20% APY locked | $0 |
| Alternative: BMO Alto 1-year CD | ~4.75% APY locked | $0 |
| Alternative: A-rated 5-year MYGA | ~5.65% APY locked (tax-deferred) | $25K+ typical |
Rates verified against Varo Bank's public rate sheet on the publication date and change frequently. Confirm current APYs directly with the bank before opening an account.
What's different about Varo
Varo Bank, N.A. is unique in the US fintech landscape: in July 2020 the OCC granted Varo a full national bank charter, making it the first consumer-facing fintech to become a fully chartered bank in the US (rather than relying on a partner bank for FDIC coverage). Varo Bank is FDIC-insured directly (cert #59238) and holds roughly $2 billion in assets.
The promised payoff of becoming a real bank was supposed to be a fuller product lineup — loans, credit cards, CDs, etc. As of mid-2026 Varo has rolled out credit cards (Varo Believe) and small-dollar loans (Varo Advance), but still does NOT offer CDs.
Why Varo's tiered savings rate matters
Varo Savings pays a headline 5.00% APY but only on the first $5,000 of balance, and only if you meet monthly activity requirements (qualifying direct deposit, debit card usage). The balance above $5,000 drops to 2.50% APY, and missing the activity requirements drops the whole balance to 2.50%.
For most savers above the $5K cap, the effective blended rate is well below dedicated HYSAs like Marcus (3.85%) or Ally (3.80%). The 5.00% APY headline is a customer-acquisition tool, not the rate most savers actually earn.
What we like about Varo Bank CDs
- Real FDIC-chartered bank (Varo Bank, N.A. cert #59238) — not a fintech sleeve
- 5.00% APY headline rate on first $5K (subject to activity requirements) is competitive
- Same login covers savings, checking, credit, and small loans
- Mobile app is highly polished
- No monthly fees on basic Varo accounts
What we don't
- No CDs offered — for locked rates you need an external account
- Tiered structure means balance above $5K earns only 2.50% APY
- Activity requirements (direct deposit, debit card usage) can be onerous for the headline rate
- Small asset base (~$2B) vs major online banks
- No retirement-specific products (no IRA, no MYGA, no annuity)
How Varo Bank CDs compare vs peers
If this rate is on your shortlist, you should also be pricing:
| Competitor | Term | APY |
|---|---|---|
| Chime Savings | No tier, no cap | ~2.00% APY |
| Current Savings Pods | Capped $6K total | ~4.00% APY |
| Marcus Online Savings | No cap, variable | ~3.85% APY |
| BMO Alto 1-year CD | 1-year lock | ~4.75% APY |
| Top A-rated 5-year MYGA | 5-year lock, tax-deferred | ~5.65% APY |
Internal benchmarks: Best 5-Year CD Rates 2026 · Best 1-Year CD Rates 2026 · Online vs Brick-and-Mortar CDs.
When a MYGA beats this Varo Bank CD
For Varo users with savings beyond the $5K tier-1 cap, the yield gap vs a MYGA is significant. Compare $50,000 over 5 years (with first $5K at 5%, remaining $45K at Varo's tier-2 2.50%):
- Varo blended ~2.75%: $50,000 grows to ~$57,275 over 5 years (taxable annually)
- A-rated 5-yr MYGA at 5.65%: $50,000 grows to $65,850 (tax-deferred)
- Pre-tax delta: $8,575 in favor of the MYGA over 5 years
Use Varo's first $5K Savings tier as your highest-yield liquid bucket. For balances above $5K committed for 5+ years, a MYGA is dramatically more efficient.
Varo Bank CD FAQ
Want to see if a MYGA beats this CD for your situation?
Free side-by-side: this CD vs. top MYGA rates for your state and amount.
CDs are safe and simple. MYGAs are insurance-company versions of CDs, often paying 50-150 bps more for the same lockup. The math depends on your tax bracket and state guaranty fund coverage.
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Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Bottom line
Varo is the rare fintech with a real bank charter, but its product line is incomplete — no CDs as of mid-2026. The 5.00% APY headline applies only to the first $5K with activity requirements; the rest of your balance falls off a cliff to 2.50%. For balances above the $5K tier-1 cap and any locked-rate need, use external alternatives: Marcus or Ally for liquid, BMO Alto for 1-year locked, MYGA for 5-year retirement money.
About Hans Goldstein: Independent retirement income specialist. CA Life License #4163961. NPN #20602398. Reviews 30+ carriers and tracks bank CD rates weekly. Phone: 213-414-2808. Email: hans@goldsteinco.net.
Disclosure
This review reflects publicly available bank rate sheets and approximate APYs as of the date stated above. CD rates change frequently — sometimes weekly — and the rates above may be stale by the time you read this. Always confirm current rates and terms against the bank's current rate sheet and disclosure documents before opening an account. FDIC insurance covers $250,000 per depositor, per insured bank, per ownership category; deposits above that amount at a single bank are not insured. This article is general information for educational purposes; it is not personalized financial advice, a solicitation, or an offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) and is not a bank, deposit broker, or registered investment adviser. CDs are bank deposit products and are not sold by insurance producers; references to CDs are for comparison context only. MYGAs (multi-year guaranteed annuities) are insurance contracts, subject to surrender charges and state guaranty fund coverage rather than FDIC. Early withdrawal of a CD before the maturity date typically results in a penalty that may exceed interest earned. Always read the actual deposit account agreement and consult a licensed advisor before making material financial decisions.