Novo Business Checking review

On the list of to-dos when starting or maintaining a business, how you handle your money takes priority. Novo has a small business focus; it already serves more than 200,000 of them. 

Novo Business Checking accounts don’t have many fees and are built to connect to plenty of other business platforms, from Amazon to Quickbooks. And although Novo isn’t a bank (it’s a financial technology company) your deposits are still covered by the Federal Deposit Insurance Corp. through its partnership with Middlesex Federal Savings.

*Annual percentage yields (APYs) and account details are accurate as of July 26, 2023.

Novo Business Checking basics

• Checking accounts: Opening a checking account is completely free and doesn’t require a minimum deposit.  
• Savings accounts: Currently, Novo doesn’t offer savings accounts. 
• Money market accounts: It doesn’t have money market accounts. 
• Certificates of deposit (CDs): Nor does it offer CDs.
• Other accounts: While there are no other types of deposit accounts, Novo Funding offers merchant cash advances.
• Bank branches or online only: Novo is completely online. 
• Special sauce: You can connect to common business tools such as Quickbooks and Google Cloud, even earning rewards for linking the accounts, and integrate with platforms like Amazon, Etsy and Ebay.

Pros

• Highly-rated app: It earned a 4.6-star rating in the Google Play Store with more than 100,000 downloads and 4.8 in the Apple App Store with over 13,500 downloads.  
• Few fees and no minimums: There are no starting fees, monthly maintenance fees or minimum minimum balance requirements, plus Novo reimburses any ATM fees. 
• Business tools: The app and website provide simple business tools and apps to help calculate and track business expenses. 

Cons

• No physical branches: You can’t walk into a brick-and-mortar location and talk with someone face to face. 
• No yield: You can’t earn interest on your checking account deposits. 
• No automatic payments: Novo doesn’t yet allow for automatically recurring payments for things like supplies, labor and other expenses (though they’re working on adding it according to a company customer representative). 

About Novo Business Checking 

You probably don’t think the words “free” or “simple” apply when it comes to banking, especially if you’re running a business. However, banks are drawing customers in with these promises;  Novo Business Checking is attempting to be one of them.

Access

All of Novo’s features and tools are online, except for its debit card, which gives you access to ATMs worldwide. While it can be difficult to deposit cash at an ATM, Novo reimburses any ATM fees, including international ones.  

If you want to transfer money out of your Novo account, you can wait one to three days for a regular ACH transfer or use the Novo Express ACH feature for free. 

To send money internationally, you’ll need to either connect a Wise account or use Novo’s embedded integration. Wise is a company specializing in inexpensive international money transfers. The fees will depend on the currency conversion.  

Third-party integrations

Novo connects to many business tools through its website and app. These include Stripe, Square, Shopify, Wise and Quickbooks. Novo offers partner perks too, providing discounts on these types of services if you integrate them with Novo. 

Tools and features

One of the reasons Novo connects with so many third-party platforms is that it doesn’t offer many of its own proprietary tools. In fact, it offers two that we found. The first is that you can fully customize and send an unlimited number of invoices from your Novo account (and set them up to reoccur).  

And while you can’t establish automatic recurring payments from your Novo account, you can set aside money within it for specific expenses. Novo Reserves let you designate a portion of your cash flow (a percentage or an amount) and label it. For example, you may funnel 15% of your business income into a Novo Reserve labeled for tax purposes.

Merchant cash advance

Novo Funding provides Merchant Cash Advances: A way to get cash quickly based on your cash flow rather than your assets or your credit score. These non-traditional loans tend to be expensive, however, so weigh their pros and cons against regular small business loans. 

How Novo Business Checking stacks up

Novo vs. Bluevine®

Both Novo and Bluevine are online-only institutions that provide business accounts. Bluevine’s business checking offers 2.00% APY but has more fees than Novo including: out-of-network ATM withdraws, outgoing wires and cash deposit fees. And, while Novo offers Merchant Cash Advances, Bluevine provides business lines of credit.  

Novo vs. Bank of America®

As one of the largest banks in the nation, Bank of America has a cornucopia of banking products and brick-and-mortar branches in addition to online services. You’re able to talk face-to-face with representatives as well as deposit cash on site, which you cannot do through Novo Business Checking.

However, Bank of America also tends to charge fees. Its two business banking account options charge several types of fees, including monthly maintenance fees, which can sometimes be avoided if you jump through hoops. 

Novo vs. Grasshopper

Novo and Grasshopper are vying for the same clientele: small businesses who want to bank online. They both provide a banking app and will connect to other popular business tools to help your business manage money.

While Grasshopper has a few more fees, its Innovator Checking Account offers up to 2.25% APY and a rewards card with unlimited 1% cash back, which, depending on your business, could make it worth the cost.