Chime and Varo are two of the largest US-based neobanks, both targeting consumers who want free checking, no overdraft fees, and a mobile-first experience. Chime is one of the largest US neobanks — the company has reported customer counts in the tens of millions; see Chime's public statements for current figures — and partners with Bancorp Bank and Stride Bank for FDIC insurance. Varo took a different path: it became the first neobank in US history to receive a national bank charter in 2020, meaning it operates as Varo Bank N.A. without needing a banking partner. The choice between them often comes down to savings rates, overdraft features, and which model — direct charter vs banking-as-a-service — you find more reassuring.
The Short Answer
Choose Chime if you want a long-running US neobank, value the SpotMe overdraft feature (covering up to $200 at no fee), prefer broader name recognition for direct deposits and bill pay, or simply want a straightforward mobile checking account. Choose Varo if you specifically value Varo's direct national bank charter (no banking partner intermediary), want the highest possible savings APY (up to 5% on the first $5,000), are interested in Varo's credit-building features (Varo Believe), or appreciate Varo's smaller, more focused product surface. Both are free and FDIC-insured; the differences are at the margins.
Savings APY Comparison
Varo Savings pays one of the highest APYs available among free neobanks: 5.00% on the first $5,000, then 3.00% on balances above that. To qualify, users need to receive at least $1,000 in monthly direct deposits and end the month with a positive Varo Bank account balance. Chime Savings Account pays around 2.00% APY (rates vary based on Federal Reserve actions), with no minimum balance and no qualification requirements. For users with smaller savings balances under $5,000 who can meet Varo's direct deposit threshold, Varo's headline rate is meaningfully higher; for users above $5,000, the gap narrows.
Overdraft and Fee Avoidance
Both eliminate the standard overdraft fees that traditional banks charge, but they handle the actual mechanics differently. Chime's SpotMe feature covers up to $200 in debit card purchases or cash withdrawals when the account would otherwise overdraft, with no fees — eligibility starts at $20 and grows based on direct deposit history. Varo's overdraft protection is more limited: Varo allows a small overdraft buffer for users who meet specific direct deposit requirements. For users who occasionally overdraft, Chime's SpotMe is the more generous and predictable feature. Neither charges traditional overdraft, NSF, or monthly maintenance fees.
Direct Deposits and Early Pay
Both Chime and Varo offer "early direct deposit" — receiving paychecks up to two days before the official pay date when employers submit early direct deposits. The implementation is essentially identical between the two. This feature is one of the commonly cited reasons consumers switch from traditional banks: a paycheck arriving Wednesday at Chime or Varo would typically arrive Friday at most legacy banks. Either platform delivers this benefit; the difference between them is not meaningful on this dimension.
Banking Charter and Regulatory Structure
This is where the two diverge most clearly. Varo became the first US neobank to receive a national bank charter in 2020, operating as Varo Bank N.A. — meaning Varo holds your deposits directly with FDIC insurance, with no banking partner. Chime is not a bank and partners with Bancorp Bank and Stride Bank to hold customer deposits and provide FDIC insurance. Functionally, both deliver FDIC-insured deposits up to $250,000. The structural difference matters for regulatory oversight (Varo is supervised by the OCC directly; Chime's partner banks are) but most users will not notice a practical difference in day-to-day banking.
Who Each Neobank Is Best For
Choose Chime if you want the largest and most-established US neobank, value the SpotMe overdraft feature for occasional shortfalls, want a more polished and feature-rich mobile experience, or use a wider range of integrated services (Chime Credit Builder, secured credit card, paycheck advances). Choose Varo if you want the highest savings APY (up to 5% on first $5,000), specifically value Varo's direct national bank charter, are working on building credit and value Varo Believe, or appreciate the simpler, less-marketed product. Many users start with Chime for its larger ecosystem and consider Varo specifically for the higher savings APY on smaller balances.
Key Takeaways
- Both are free, mobile-first US neobanks with no monthly fees and FDIC-insured deposits.
- Varo holds the first US national bank charter for a neobank (Varo Bank N.A.); Chime partners with Bancorp Bank and Stride Bank.
- Varo Savings pays up to 5% APY on the first $5,000 (with direct deposit qualification); Chime pays around 2% APY with no qualification.
- Chime's SpotMe overdraft covers up to $200 with no fees; Varo's overdraft buffer is smaller.
- Chime is the largest US neobank by user count (~22M) with broader name recognition for direct deposits and bill pay.
Top Platforms
| Platform | Category | Key Feature | |
|---|---|---|---|
| Chime | Largest / Established | SpotMe up to $200, broadest brand recognition, polished mobile app | View listing |
| Varo | Direct Bank Charter | 5% APY savings (first $5K), national bank charter, Varo Believe credit builder | View |
| SoFi | Full-Service Neobank | Banking + investing + loans in one app; sign-up bonuses | View listing |
| Ally Bank | Online Bank | Online-only bank with strong savings APY and broader product surface | View |
How to Choose a Platform
- If you have under $5,000 in savings and can meet Varo's direct deposit threshold: Varo's 5% APY is meaningfully better.
- If you occasionally overdraft and want a larger overdraft buffer: Chime's SpotMe currently covers up to $200, larger than the buffer Varo advertises.
- If you want the longer-running and more widely recognised US neobank: Chime — see the company's public statements for current customer numbers.
- If you specifically value a direct national bank charter: Varo is the only US neobank that holds one.
- If you want banking plus investing and loans in one app: consider SoFi instead — both Chime and Varo are checking-and-savings focused.
Frequently Asked Questions
Are Chime and Varo really FDIC-insured?
Yes — both offer FDIC insurance up to $250,000 per depositor, but the structure differs. Varo is a chartered bank itself (Varo Bank N.A.) and provides FDIC insurance directly. Chime partners with Bancorp Bank and Stride Bank, both FDIC-insured banks; deposits are technically held with the partner bank, with Chime providing the user-facing app and brand. From a consumer protection standpoint, both deliver the same $250,000 FDIC coverage on eligible accounts.
Why is Varo's savings APY so much higher than Chime's?
Varo deliberately pays a higher APY on smaller balances as a customer acquisition strategy. The 5% rate applies only to the first $5,000 in savings, dropping to 3% above that — meaningful for new users with smaller balances but less impactful for larger savers. Chime's 2% APY is more competitive at higher balances and has no qualification requirements. Both rates fluctuate with broader interest rates set by the Federal Reserve.
Can I have both Chime and Varo accounts?
Yes — many users have accounts at multiple neobanks for diversification or to capture specific features. Common patterns: Chime as the primary checking account for SpotMe, Varo as a secondary account for higher-APY savings on the first $5,000, Ally or SoFi for additional savings or investing tools. Setting up direct deposit splits between multiple accounts is straightforward; both Chime and Varo provide bank routing and account numbers compatible with employer direct deposit systems.
Which has better customer support?
Chime has a larger support operation reflecting its much larger user base, with 24/7 phone, chat, and email support. Varo also offers comprehensive support but with shorter operating hours and a smaller team. Both have improved significantly since their early days; complaints have shifted from neobank-specific issues to more universal banking concerns (account holds, fraud disputes). For users who anticipate needing frequent customer support, Chime's scale generally results in faster response times.
Related Guides
How to Choose a Neobank: What to Look For in a Digital Bank
Read Digital BankingWhat Is a Neobank? Complete Guide to Digital Banking (2026)
Read Digital BankingChime vs SoFi (2026): Which Neobank Should You Choose?
Read Digital BankingChime vs Current (2026): Which Mobile Bank Is Right for You?
ReadFeatured in the Directory
Chime
Financial technology company providing fee-free mobile banking services. Offers early direct deposit, automatic savings, no overdraft fees, and a network of fee-free ATMs to promote financial wellness.
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Provides suite of financial products including student loan refinancing, mortgages, personal loans, credit card, investing, and banking. Offers comprehensive financial services with competitive rates and member benefits.
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