US mobile neobank Varo Money is raising the interest rate on its FDIC-insured Varo Savings Account to 2.80%.

In the process Varo Money shoots to the top of the best buy table for US savings accounts.

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Varo Money’s new 2.80% savings rate is more than triple the 12-month average US national Certificates of Deposit rate.

And it far outstrips the paltry 0.09% that is the national average savings rate.

Varo Money 2.8% savings rate: conditions

There are a few catches that will limit the appeal of the Varo Money account.

  • Customers require to make direct credits to their account of at least $1,000 per month;’
  • customers must use their Varo debit cards to make at least five purchases each month;
  • The 2.8% rate applies to deposits up to $50,000

Varo Money’s existing rate of 2.12% will apply if these conditions are not met.

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“We’ve got a serious savings problem going on in America and banks aren’t doing enough to address it,” says Varo Money co-founder and CEO Colin Walsh.

“Four in 10 Americans can’t cover a $400 surprise expense without selling something or going into debt. The typical working-age household has only $3,000 in retirement assets.

Varo Money: on a mission

“Varo is on a mission to help improve people’s financial well-being. We’re proud to put a stake in the ground with a market-leading rate for FDIC-insured accounts.”

In August 2018, Varo was granted preliminary approval for a national bank charter. by the Office of the Comptroller of the Currency (OCC).

When it opens as a national bank, Varo will offer customers an expanded range of banking products and solutions.

Last September, Varo Money selected Temenos’ T24 Core Banking and Lifecycle Management Suite.

Varo was founded in 2015 and has raised more than $144m in funding. Lead investors include Warburg Pincus and The Rise Fund, a global impact fund led by private equity firm TPG.