The Novo Business Checking account is an online business bank account offered in partnership with Middlesex Federal Savings. It is designed to eliminate many of the pain points commonly associated with business checking accounts, particularly regarding fees.
Who is the Novo Business Checking account for?
Novo is designed for a broad spectrum of business owners, from freelancers working a side hustle to established corporations with millions in sales. For the time being, Novo only offers accounts to U.S.-based businesses.
Features of the Novo Business Checking account
While there is no such thing as a perfect bank account for everyone,
Novo Business Checking has some pretty unique features that many small businesses might find valuable.
1. No fees at all
Novo doesn’t charge its business checking account customers monthly account fees, deposit fees, balance fees, excess transaction fees, or other fees customers commonly expect from business checking accounts. Novo also offers unlimited ATM fee reimbursement, even internationally, and doesn’t charge any fees for international debit card purchases either.
In fact, the only fee on the bank’s fee schedule is a $27 charge for insufficient funds or returned payments.
2. Easy-to-use mobile app
Novo has an easy-to-use mobile app that allows you to conduct most necessary banking for your business. In the Google Play and App Stores, Novo’s app holds 4.5 and 4.7, respectively, out of a five-star rating, which are among the highest ratings we’ve seen for any banking apps.
3. Exclusive perks for account holders
Novo account holders get access to some pretty impressive money-saving perks through the company’s partnerships. For example, members can save up to $500 on Stripe card payment processing, get 6% back on travel on Booking.com when using a Novo debit card, and get $150 in Google Ads credits, just to name a few.
4. Low minimum deposit
You can open a Novo Business Checking account with as little as $50. There is no minimum ongoing balance requirement, and you won’t be charged a fee if your balance drops below a certain level.
How to access your money with the Novo Business Checking account
Obviously, there aren’t quite as many options when it comes to depositing and withdrawing money with an online business checking account as you’re likely to find with a branch-based one. That said, Novo makes it much more convenient to move money in and out of its accounts than many of its peers.
There are a few ways to deposit money into a Novo Business Checking account. The Novo app allows for easy mobile check deposits, and also makes it easy to transfer money from a connected external bank account or digital wallets like PayPal and Venmo.
The biggest downside of the deposit issue is that the Novo Business Checking account isn’t designed to accept cash deposits. Some other online bank accounts offer ways to do this, such as going into a retail store and depositing at a cash register, but Novo doesn’t offer this.
Novo Business Checking account holders can withdraw their money from any ATM — anywhere in the world. On their monthly statements, any ATM fees that have been incurred will be refunded.
In addition, Novo allows account holders to request a paper check be sent to any recipient, and there’s no reason this can’t include the account holder themselves.
Finally, Novo makes it easy to link external bank accounts to move money around. For example, if you have a branch-based business savings account, you can withdraw money from your Novo account for transfer into that account with the click of a button.
Advantages to using Novo for your business checking account
Novo’s primary focus is to make banking easy and inexpensive compared to traditional business checking accounts, and most of the perks of the account are along these lines:
1. Quick application
Many other business checking accounts (especially those offered by branch-based banks) have somewhat complex application processes. With Novo, you can open a business checking account in just a few minutes, and the entire process can be completed from your smartphone.
2. Integrates with other business tools
The Novo Business Checking account is designed to integrate with some of the most popular software programs and apps used by small businesses. While many business accounts connect seamlessly with QuickBooks, Novo also connects with Slack (to receive account updates), Shopify, Stripe, Zapier, and several others.
3. Unlimited ATM fee reimbursement
Branch-based checking accounts offer free ATM withdrawals at their own ATM locations. Many online banks partner with ATM networks or offer some amount of ATM fee reimbursement. Novo takes it to the next level, allowing customers to withdraw money from any ATM, and get refunded on any ATM fees.
4. Free bill pay
Novo allows customers to send money and make payments quickly and easily. They can use both electronic transfers and paper checks to send money with no fees whatsoever.
5. Link other accounts
As we’ll discuss in the next section, there certainly can be some benefits to maintaining branch-based business accounts. But Novo is designed to complement other accounts, allowing customers to link their external accounts for quick and easy transfers.
6. Checks are free
Business checks can be expensive, especially if your business has to send dozens or even hundreds of checks each month. Through the Novo app, you can request to have paper checks mailed to whomever you want at no cost whatsoever. If you want an actual checkbook, you’re able to order one through any third-party check provider (for a fee).
Drawbacks of using Novo for your business checking account
Before you consider Novo for your business banking needs, here are some of the potential drawbacks you should keep in mind:
1. No branches
The Novo Business Checking account is a 100% online banking product and has no branch networks. While the need for small businesses to physically go to the bank has decreased significantly in recent years, if you want the ability to get face-to-face help or quickly deposit cash, you might want to look at some of the business checking products offered by branch-based competitors.
2. No interest-bearing options
Although Novo’s website specifically says it wants to explore interest-bearing options for its customers in the future, the company’s business checking account currently doesn’t pay interest and there is no savings account option for the time being. Some other online business checking accounts pay interest on customers’ unused cash balances.
3. No outgoing wires
Novo allows account holders to receive wire transfers (for free), but customers cannot send wires directly from their Novo accounts. The bank has partnered with TransferWise to facilitate international wires (for a fee), but there is currently no way to send domestic wires through Novo.
4. No loans or other banking services
Novo’s sole product is its business checking account. If you need other banking services, specifically loans or credit products, you’ll have to look elsewhere.
5. Not cash-friendly
The Novo Business Checking account isn’t designed to accept cash deposits. In order to deposit cash into a Novo account, you’ll have to deposit it into another account first, then transfer the money in. If you’re in a business that regularly deals with cash deposits, Novo might not be the most convenient option for you.
Is the Novo Business Checking account right for you?
There’s no one-size-fits-all business checking account, and Novo’s certainly isn’t an exception.
In a nutshell, the Novo Business Checking account could be an ideal fit for businesses that want to keep their banking expenses as low as possible and deal mainly with electronic payments. It might not be the best choice for cash-heavy businesses or businesses that want the ability to borrow money or access other banking services.
View more information: https://www.fool.com/the-blueprint/accounting-finance/business-checking/novo-business-checking-account-review/