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When you’re starting a new business, there’s no doubt that money is always top of mind. And since managing your money is so important, you need to have a business bank account. This account will allow you to store your funds, pay anyone you work with—plus, it will help you separate your personal and business finances. Although you have the option to get your business checking account with a traditional bank, you might also want to consider an online-only business bank account.
These online or app-only bank accounts are relatively new to the market, but have grown quickly in popularity due to their ease-of-use and the benefits they offer, especially for small business owners. In comparison with their brick-and-mortar bank counterparts, these online business bank accounts often include features like no fees, no minimum balance, and unlimited transactions. Founded in 2016 and launched in 2018, Novo Bank is one of these digital players, giving business owners the ability to apply for a business banking account in a matter of minutes.
Interested in Novo’s business checking account but unsure if this account is the right fit for your needs? In this Novo Bank review, we’ll take a look at the specifics of their business checking account, how to open one, the features it offers, as well as alternatives—so that you have the knowledge to help you pick the best checking account for your business.
As previously mentioned, Novo is a digital bank that offers a free business checking account for small business owners. In fact, Novo was created specifically with startups and small business owners in mind. Currently, Novo’s business checking account is their only offering and is accessible through their iOS app (with Android and web versions coming soon).
You can apply for a Novo business checking account online—just provide your basic personal information, business information, and answer a few questions about your business. Once you’re set up with your account, you can link bank accounts, make payments, process ACH transfers, and deposit checks. With your account, you also receive a free, EMV chip protected, Novo debit card.
Novo checking accounts are available to any business owner operating a U.S.-based business, regardless of entity type. Additionally, Novo can support businesses across multiple industries with the exception of those providing or exchanging cryptocurrency, privately owned ATMs, money services, unlawful internet gambling, or cannabis sales. Novo’s business checking accounts have bank-grade fraud protection and are also FDIC-insured through Novo’s partner bank, Middlesex Federal Savings, a community bank located outside of Boston.
Open a Novo Account Now
Now that we’ve gone through the basics of Novo, let’s breakdown this business checking account even further and explore the features included with a Novo account.
Once again, you can apply for a Novo business checking account online in only minutes. After you’ve been set up with your account, you’ll have access to everything Novo Bank has to offer, all through their iOS app. With your Novo account you can:
Additionally, although Novo uses ACH transfers instead of paper checks, if you need to issue a physical check, Novo will both process and send it for you. If you have cash you want to deposit to your Novo account, on the other hand, you must purchase a money order and then use the Novo digital check deposit. Novo does not have any physical bank branches or a designated ATM network. By default, Novo account statements are sent to your business mailing address; however, you can also export transaction data via a CSV file from the app. These CSV files are compatible with both Xero and QuickBooks.
In addition to your Novo business checking account, you also receive a Novo Mastercard business debit card. This Novo debit card is EMV chip protected and comes with the Mastercard Zero liability policy for any authorized purchases. You can use your Novo debit card worldwide as well as with both Apple and Google Pay.
Through the Novo app, you receive instant notifications for every transaction. If you have more than one person who needs to use your Novo account, you can set up your account for multiple user access. Furthermore, the Novo app can integrate with other business tools including Xero, Zapier, Slack and payment gateways like PayPal and Stripe. Although you can receive wire transfers with Novo, you cannot currently send them—but you can integrate the Novo app with Transferwise to gain this functionality. Novo also provides 24/7 customer support and fraud protection account monitoring.
As we mentioned earlier, one of the competitive advantages these digital banks have over their traditional counterparts is the lack of fees often associated with their accounts—and Novo Bank is no exception. Probably one of the most compelling aspects of Novo’s business checking account for small business owners, is, in fact the near-complete lack of fees.
That being said, the Novo business checking account is free—all it costs is a $50 initial deposit to activate all your account features. This $50 is not a fee, on the contrary, it’s simply what you use to open the account, but it is always your money. After you deposit this initial $50 to set up your account, the account is free. Novo does not charge a monthly service fee and does not require you to keep a minimum balance.
Additionally, Novo does not charge you for:
Novo also does not charge you to use an ATM and you can withdraw up to $1,000 per day. You should remember, however, that when withdrawing money from an ATM, you will have to pay any fee that the owner of the ATM may charge for use.
Furthermore, you have very few limits on the functionality of your Novo account. Novo business checking accounts do not have transaction or transfer limits nor minimum or maximum deposit amounts. Novo does advise, however, that if you know you’ll be making a large payment or deposit, to contact their support team and let them know, so the transaction is not flagged as fraudulent activity.
Ultimately, Novo Bank only charges fees in two circumstances: insufficient funds and uncollected funds returned. If you overdraft your account, you’ll trigger the insufficient funds fee, which is $27. The uncollected funds fee, on the other hand, is charged when you attempt to spend funds in your account that are not yet available, like if your funds from a deposited check have not yet been cleared by the check-issuing bank. This fee is also $27.
As we’ve discussed, Novo Bank has a lot to offer with their business checking account. Here are some of the biggest advantages of choosing Novo:
It’s hard to compete with the fees associated with the Novo business checking account—they’re practically non-existent. Unlike the hidden fees and service charges you see with most typical business checking accounts, Novo doesn’t charge you a monthly fee, doesn’t require you to keep a minimum balance, and allows you to make as many transactions as you require. Additionally, Novo offers free check processing and mailing (if you need it), as well as a free business debit card included with your account—that you can use worldwide. If you’re a business owner who’s just starting out, or simply wants to cut unnecessary costs, these are huge benefits of Novo.
Furthermore, although Novo charges fees in two instances, they are relatively low fees, only $27 for each. Plus, because of the specific circumstances that incur the fees, insufficient and uncollected funds, Novo is actually encouraging you to pay close attention to your finances. If you’re monitoring your transactions carefully, you will be able to try to avoid the circumstances that lead to those fees.
Not only is the Novo Bank business checking account extremely affordable, but it also offers you great functionality for your business’s financial activities. Through the Novo app, you can accept payments, make payments, deposit checks, and more—essentially everything you can do with a business checking account from a traditional bank. Novo gives you access to all the tools you need to run your business transactions. The integrations that Novo offers are particularly important for these purposes. Although Novo currently only integrates with a handful of third-party platforms, the ones you can use (including payment gateways) certainly allow you to optimize the way your business runs.
With an online application that takes only minutes and one iOS app to manage your entire account, there’s no doubt that Novo was designed for business owners to be able to use it quickly and easily. Unlike the time and difficulty that’s often associated with accounts from big banks, the Novo app makes it simple to view your transactions, send and receive money, and get assistance from Novo customer support. Additionally, since your Novo checking account is wholly available on iOS devices, you have added flexibility concerning when and where you can manage your business’s finances. No matter where you go, you can easily access your bank account—a useful feature for busy business owners.
Although there are definite benefits of the Novo business checking account for business owners, there are disadvantages to consider as well. Here are a few:
Whereas other business banking providers have different checking account offerings, Novo only has one. In this case, you don’t have the option to look and compare different offerings within Novo for what works best for your business. Instead, what you see is what you get—Novo has one account, one feature-set, and one list of associated fees. Although, as we’ve mentioned, Novo offers a great amount of features for very little cost, if you’re looking for more plans to explore within one provider, you won’t currently find that with Novo Bank.
Since Novo is a digital-based bank, and therefore, has no physical locations, your business’s ability to deal with cash is severely limited with this checking account. With Novo, you can’t deposit cash unless you purchase a money order and then deposit it using the Novo app check deposit. Additionally, although you can take cash out of ATMs, you also have to pay the fee from the ATM provider (if they have one). Novo, unlike Azlo, for example, does not have an ATM network where cash withdrawals are completely free if you use an ATM within that network. If your business deals mostly in cash, therefore, it’s going to be difficult to truly utilize the Novo business checking account.
Novo bring a lot to the business checking account table, especially considering they only launched in 2018. However, that being said, their product is still fairly new, which means it’s going through constant development and updates. Along these lines, although the Novo website says Android and web versions are coming soon, currently you can only use Novo on iOS devices. If you don’t have an iOS device, therefore, you can’t currently use Novo Bank for your business checking account.
Similarly, right now Novo can only integrate with a handful of third-party apps—and is missing integration capabilities with some very common business tools, like QuickBooks. Again, Novo’s website addresses many of these concerns, saying more features are coming, and they’re working on including the functionalities their customers ask for. However, all of this is part of a development process, and it’s hard to know when exactly their plans will come to fruition and how well the additions will work. Unfortunately for Novo, other providers have the advantage of time, and they may offer capabilities that Novo is missing—and that could sway you if you can’t wait for certain features.
As you might expect, the Novo Bank reviews on the internet are limited since their business checking account is relatively new. However, in addition to the banking reviews from startups and business owners quoted on the Novo website, we talked to Jimmy McMillan, owner of HiBMI.com, an online independent life insurance agency, who recently switched from a traditional bank to the Novo business checking account. He said:
“I love Novo banking! One of the best features is its integration with other apps that I use every day. I manage a content creation team through Slack, and I can pay my freelancers and my editors right through the app automatically. It is very simple and convenient.”
Some additional Bank Novo reviews can be found on the iOS App Store. These reviews are mixed: Some users love the app and the ease with which they can use their business checking account, whereas others criticize Novo for technical and service issues, particularly regarding getting their account set up. To Novo’s credit, however, their customer service team responds to the majority of the reviews (both positive and negative).
Before you decide on Novo for your business checking account needs, you should look into some of the available alternatives—many of which have very similar benefits to Novo. Here are two particular options worth considering:
Like Novo, Azlo is a digital bank, and a big player in this new space. Azlo also has one offering, their business checking account, which you can apply for online. Once you’re set up with an account, you can access it through the Azlo app on any iOS or Android device, as well as online.
With the Azlo business checking account, there is no first minimum deposit, no minimum balance, no monthly fees, and free unlimited transactions. Also, whereas Novo charges fees for insufficient funds and uncollected funds returned, Azlo is truly fee-free. Additionally, Azlo partners with the Allpoint network, which gives you the ability to withdraw cash from over 55,000 ATMs for free. If you use an out-of-network ATM, Azlo, like Novo, won’t charge you a fee, but you will have to pay any fee from the owner of the ATM.
Another significant feature of the Azlo checking account is the invoicing capabilities. From your Azlo account, you can invoice clients and offer them three payment options: mailing a check, sending a wire or bank transfer, or pay via credit or debit card. Like Novo, Azlo can integrate with payment processors, as well as other business tools. If you’re looking for all of the functionality of a Novo account, therefore, as well as a free ATM network and absolutely no fees, Azlo is a notable option.
Open an Azlo Account
If you’re interested in a business bank account provider that offers multiple account options, you’ll want to look at Axos. Axos, like Novo and Azlo is another online bank with a free checking account offering. The Axos Bank Basic Business Checking Account has no monthly fee and requires no minimum daily balance. Unlike Azlo and Novo, however, you need a $1,000 minimum opening deposit and you only have up to 200 free items (debit, credit or deposited items) per month. After the first 200 items, you have to pay $0.30 per item.
Additionally, unlike Novo and Azlo, with an Axos Basic account, you have access to a nationwide surcharge-free ATM network, as Axos reimburses you for any fees you incur from using an ATM. Furthermore, if you want a checking account that actually earns you interest, Axos offers their Business Interest Checking Account. Although this account has more requirements—100 minimum initial deposit, a monthly service fee of $10 if you don’t maintain an average daily balance of $5,000, and only 50 free items per month—you have a 0.80% annual percentage yield with this account.
The Axos Business Interest Checking account also has unlimited ATM fee reimbursements and no withdrawal or transfer restrictions. Therefore, if you want truly free ATM usage or this feature plus a checking account with interest, and are willing to take on a few limitations, Axos’ two account offerings are certainly worth considering.
Open an Axos Account Now
At the end of the day, choosing a business checking account is an important decision—and only you can determine which account is right for you. If you’re looking for a digital bank with essentially no fees though, Novo is a strong option for your business checking account. Novo gives you the ability to manage much of your business finances for free and has the ease-of-use and flexibility most traditional banks do not have.
If, however, you are concerned with adding up ATM fees and want increased functionality with your business checking account, you might consider Azlo or Axos as alternatives. Additionally, if your business deals mostly in cash, a digital bank might not be the best option for you—you might consider a low-cost, small-business-friendly offering from a traditional bank, like the Chase Total Business Checking Account.
And yet, regardless of which business checking account you ultimately choose, we think it’s worth keeping an eye on Novo’s website, as it seems very likely that their features, capabilities, and offerings will be growing and expanding in the future.