If the only thing you hate more than filing your taxes is paying to file your taxes, you might want to check out Varo Bank. This online bank, which consistently earns a spot on CNET Money’s best high-yield savings accounts list, announced in January that all account holders can now prepare and file federal and state tax returns for free through its Varo Bank app.
Customers who use the app can file simple tax returns in as little as 15 minutes and will have access to their return up to five days early, Varo said in a press release announcing the service through a partnership with Column Tax.
If you’re dreading tax season, considering a new bank account or both, here’s what you need to know.
How Varo’s free tax filing works
To use Varo’s free service, you’ll first need to have a Varo account, then access Column Tax, a tax filing service embedded within the Varo app.
From the home screen of the Varo app, go to Start Your Free Tax Return to begin filing. Column Tax will automatically pre-fill some information from your Varo account to help you complete your return faster.
The IRS started accepting tax returns on Jan. 29 and the deadline to file this year is April 15, 2024.
How to find other free tax filing services
Although Varo says it’s the first US bank to offer free tax prep and filing, there are other options for free tax-filing services, but most come with their own conditions.
For example, the IRS partnered with seven of the country’s largest online tax-prep companies to offer the IRS Free File service to process and submit a simple return for free. It’s available to filers whose adjusted gross income last year was $79,000 or less in 2023.
Taking advantage of these free services can save the average taxpayer $240 to prepare and file a tax return, according to a 2022 Taxpayer Advocate report to Congress.
How does Varo compare to other online banks?
With the addition of its free tax-filing service, Varo expands its stable of banking products designed for people just starting out managing their own finances or for people who may be living paycheck-to-paycheck.
Among the services the online-only bank offers:
High-yield savings account: Unlike some online banks that require a larger amount to earn higher interest rates, Varo takes the opposite approach — it offers 5.55% APY if your daily balance never goes over $5,000 during a monthly billing cycle. Anything over $5,000 earns 3.00% APY for that month. To qualify for any interest, you’ll need to have $1,000 in direct deposits every month and end each month with a positive balance in your accounts.
Checking account: Varo’s checking account lets you get your paycheck two days sooner, and it comes with a debit card that earns cash back from more than 50 brands. The bank touts that it charges no overdraft fees and no monthly account fees.
Varo To Anyone: This free, instant payment service is similar to Zelle (which Varo also offers). You can send, receive and store money from Varo Bank accounts. Transfers can be sent to anyone with a US debit card, regardless of where they bank.
Varo Advance: Consider this a low-cost version of a payday loan. If you have an active Varo Bank account, you can use this service to help you get cash quickly. Lines of credit range from $20 to $250, with fees ranging from $4 to $15.
Varo Believe: The bank’s only credit card offering is a secured credit card — good for those trying to build or rebuild their credit.
How do I open a Varo bank account?
To open an account, you’ll need to fill out an online application and provide the following information:
- Email address.
- Mobile phone number.
- Physical address.
- Date of birth.
- Citizenship status.
- Social Security number.