Novo 2022 Review
As a business owner, you need a business checking account with attractive features that don't charge a lot of unnecessary fees. The account should provide an easy way to deposit payments and pay bills with no monthly fees or minimum balance requirements. The Novo business checking account includes all of this and more in a powerful, yet simple, business checking account for all sizes of companies. Whether you're just getting started, have an established business, or running a side gig to make extra money, a Novo checking account for your business might be a good idea. In this article, we'll review Novo to cover the pros and cons, share how their accounts work, and describe the drawbacks that you should be aware of.
- No monthly fees or minimum balance requirements
- Deposit checks with your phone instantly with remote check deposit
- Free incoming wires and ACH deposits
- Send unlimited invoices for free
- Create up to five Reserves to set aside money
- App integrations include Stripe, Etsy, Xero, Amazon, and more
- Does not offer business credit cards or savings accounts
- No physical checkbooks are available
- Certain industries are not eligible to open an account
- Must have a Social Security number, U.S. address, and U.S. cell phone number to open
How does Novo business checking account work?
The Novo business checking account is an online-only account that offers many of the same features and benefits as a traditional bank account. While Novo is a financial technology (Fintech) company, Middlesex Federal Savings, F.A. (Member FDIC) handles all of its banking services. Middlesex also offers FDIC insurance protection of up to $250,000 for each customer.
Your business checking account can be set up in just three simple steps and takes just a few minutes. There are no monthly fees or minimum balance requirements. However, you must deposit at least $50 to open an account. Novo checking accounts are designed for small business owners, entrepreneurs, and freelancers. So, even if you have a small side hustle, like driving for Uber, selling on Etsy, or tutoring kids, you're welcome at Novo.
All account holders receive a debit card to make purchases online or in person. While waiting for your debit card to arrive, you'll have access to a virtual card immediately through the Novo app to start making purchases. Novo waives many of the fees for sending or receiving money that other banks charge for. Additionally, you can send payments via free online bill pay or ACH transfers. However, you do not have access to write physical checks yourself.
No monthly fees, free ACH payments, and other perks
There are numerous benefits of having a small business checking account with Novo. Its checking account offers many of the same features that you'd expect from a traditional bank. Plus, there are some innovative features that a typical bank doesn't offer.
No monthly fees or minimum balance requirements
Novo does not charge a monthly fee for having a business checking account. Additionally, there are no minimum balance requirements to waive fees. To open your Novo checking account, you just need to make an opening deposit of at least $50.
Free incoming and outgoing ACH transactions
In an increasingly digital world, you need to make payments quickly. Novo offers free incoming and outgoing ACH transactions that process quickly and efficiently. Many traditional banks charge a fee or require a premium account for this service.
Free incoming wires – domestic and international
If you're receiving money via a domestic or international wire, there are no fees. Most traditional banks charge for the receipt of a wire transfer. You cannot send wires with Novo, but they offer integration with TransferWise so you can send international wires. Novo does not charge for this service, but fees may apply with TransferWise.
Virtual debit card
Customers have access to a virtual debit card through the Novo app while waiting for their physical debit card to arrive. Once the physical debit card arrives, you can continue using the virtual card for online or over-the-phone payments. The virtual card can also be used with Apple Pay or Google Pay.
Send invoices and track payments
An innovative feature of the Novo business checking account is the ability to send personalized invoices in seconds. Novo integrates with Stripe, Square, PayPal, and more to get paid your way. Or you can avoid transaction fees by accepting payments through ACH or checks. There is no charge for this service and no limit to the number of invoices you can send.
Set aside money with Novo Reserves
Create up to ten Reserves to set aside money for any purpose that you want. Examples include taxes, profit, payroll, and other large business expenses. Instantly move money in and out of your Reserves as needed. In the future, you'll be able to create rules that automatically allocate a portion of your deposits to selected Reserves
Deposit checks easily
With the Novo app, you can deposit checks easily into your business checking account. You can deposit an unlimited number of checks and there is no charge for this service. Simply take a photo of the check with the app and fill in the details of the payment. Additionally, you can transfer funds between Novo and other bank accounts from any device with no minimum deposit amounts.
Innovative Novo apps and integrations
The Novo App Marketplace offers numerous workflow solutions and integrations to choose from. Participating companies include Shopify, Stripe, Etsy, Xero, WooCommerce, and Amazon. With these apps, you can track your sales and balances, send money overseas, automatically sync with your account software, and more.
In fact, Novo is a Stripe Verified Partner. This enables you to see your Stripe balances from your Novo account and you'll soon be able to receive your Stripe payouts instantly. For new accounts, you'll receive $20,000 in fee-free processing when you sign up for Stripe.
The main drawback of the Novo business checking account: Limited deposit and payment capabilities
Novo offers many traditional bank functions, but it does not offer every feature that a full-service bank does. The biggest drawback is its limited deposit and payment capabilities. These are the biggest issues that some businesses may face:
- Cannot deposit cash or coins. Since Novo bank accounts are online-only, there are no branches available where you can deposit cash or coins received from customers. If you have a cash-intensive business, you'd need a second account to handle these deposits.
- No physical checks. You can send physical checks through Novo's free online billpay. However, you will not have a checkbook to write checks on the spot. Keep in mind that mailed checks from Novo may take several days to arrive.
- No option to send domestic wires. While you can send international wires through Novo's integration with TransferWise, there are no options to send domestic wires. However, you can send an unlimited number of ACH payments for free.
- Fees for NSF checks and bounced deposits. Novo charges a $27 fee if you make a payment when you have insufficient funds or a returned deposit item. These are the only fees charged by Novo.
- Does not offer savings accounts, loans, or credit cards. Novo excels with its business checking account, but it does not offer many of the ancillary deposit and credit products that traditional banks offer.
Will online banking work for your business?
The answer to this question depends on the type of business you have and what you're looking for in a banking relationship.
The Novo business checking account offers many attractive features for small businesses, but it isn't the right solution for everyone. It is an attractive business checking account full of features that most small businesses need. There are no monthly fees, no minimum deposit requirements, and free incoming wires. Plus, you can send or receive ACH payments for free. The only fees that it charges are for insufficient funds for a purchase or receive a returned deposit item.
Novo isn't right for your business if you need...
- The ability to walk into a branch and speak face-to-face with a banker.
- To deposit coins and cash.
- To send domestic wires.
- A checkbook to write checks on the spot.
- Interest on your bank balances.
- A full-service bank that offers loans, credit cards, savings accounts, and other features.
How to apply for a Novo business checking account
If you're ready to open a Novo business checking account, here's how to do it.
- Go to Novo and click "Get started."
- Provide your email address and create a password.
- Enter the code that is sent to your email address.
- Provide your personal information (name, citizenship, mobile phone, address, date of birth, and Social Security number).
- Provide business information (address, phone, website, EIN, banking volumes).
- Upload a copy of your Driver's License or Passport.
- E-sign bank agreements.
Once you submit your application, Novo responds within 1-2 business days with your account information. If it is unable to open your account, Novo may ask additional questions or request additional documents. The documents necessary to open your account vary based on your business structure and which state it is located in.
Requirements to open a Novo checking account
To open a checking account with Novo, your business must have a U.S. address. As the owner, you must have a Social Security number and a cell phone number that is not a virtual number. There are no credit inquiries when opening your business checking account.
Additionally, Novo does not allow business checking accounts from these types of businesses:
- Cryptocurrency and money services
- Privately owned ATMs
- Money service businesses
- Adult entertainment industry
The bottom line
Novo offers a powerful, yet simple, business checking account for all sizes of companies. Whether you're just getting started, have an established business, or running a side gig to make extra money, you should consider opening an account with Novo. There are no monthly fees or minimum balance requirements, and you can open an account with just $50. And Novo provides free incoming wires and ACH deposits plus a virtual card number to make payments. This makes it easier than ever to get your business checking account started with Novo.
Frequently Asked Questions
Does Novo have business credit cards?
Novo does not currently offer business credit cards. However, each customer receives a debit card that can be used when making purchases. Novo also offers a virtual card number through the app which can be used to make purchases online, through Apple and Google Pay, or over the phone.
Is Novo a business account?
Yes, the Novo checking account is designed for business owners. Whether you've been in business for years, are just getting started, or have a side hustle, the Novo business checking account might be a good fit for you. Accounts are available to sole proprietors, LLCs, partnerships, corporations, and more.
Does Novo have a business savings account?
Novo does not currently offer a business savings account that earns interest. Instead, customers can create up to ten "Reserves" to set aside funds. These accounts can be used to save for any purpose, such as taxes, payroll, and other large purchases. Novo will soon roll out the ability to automatically allocate a portion of your deposits to your selected Reserves.
What bank does Novo use?
Novo is a Fintech company, but not a bank. It partners with Middlesex Federal Savings, F.A., Member FDIC, to provide its banking services. Additionally, since your accounts are with Middlesex, your deposits are FDIC-insured for up to $250,000 in case something happens to the bank.
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