This Novo Bank review will provide small business owners, entrepreneurs, and freelancers all the essential information they need to know. This will particularly tackle the products and services, as well as features that make it stand out from the rest.
A research conducted by Statista found that there is an increasing number of people using digital banking in the United States. In fact, in 2018, about 61 percent of American people used digital banking. More so, the study shows that by 2022, the number will rise to 65.3 percent.
The increasing number of Americans using digital banking platforms is actually not surprising given the fact that people nowadays prefer the more convenient and efficient option. Needless to say, with the recent turn of events — with the pandemic restricting a lot of our day-to-day transactions or activities — people have relied more on anything digital to limit their exposure to the outside world.
Having said that, businesses, over the years and most especially in the very recent year had to adapt to changes. They had to address the needs of customers by going digital on their daily operation – and that includes banking, of course.
An article published by BBC online says that “several major technology trends are converging and transforming digital banking services for businesses”. Again, this has something to do with adapting to change as well as customer demands.
Furthermore, the article says that based on research, it has been found that banks these days need to “provide a better, more relevant service, and invest in products that meet the changing customer needs of real-time, mobile, frictionless and simple banking“.
You see, the demand is so high that even banks, particularly digital banks need to step up their game, otherwise, they will end up at the bottom of the competition.
Anyway, while there are a lot of digital banks for personal use, they’re quite a few that focuses on small businesses, entrepreneurs, as well as freelancers – and Novo Bank is one of them.
So, if you belong to the business world, and you are looking for a reliable and dependable digital bank that meets your needs, this review on Novo Bank is for you.
In this Novo Bank review, we are going to tackle some – if not all – of the most important details you need to know prior to opening an account.
This will particularly provide you answers to the following most commonly asked questions:
- What is Novo Bank?
- Who is Novo Bank best for?
- What are the products offered by Novo Bank?
- How to do banking with Novo Bank?
- Is Novo Bank safe?
- What to like about Novo Bank?
- What not to like about Novo Bank?
WHAT IS NOVO BANK?
Before moving on to a more detailed review, let us first and foremost know more about the Novo Bank.
As a potential customer, it is important to do a little research on the banking institution that you are eyeing for. This helps you compare among different digital bank choices, and eventually make a choice based on what suits best your needs and preferences – in this case, though, to your business’s needs.
So, with that said, here’s what you need to know about Novo Bank:
Novo Bank is an online bank that is specifically designed for small businesses, entrepreneurs, and freelancers. In fact, the bank lives by its motto, which is “customer first banking for the modern entrepreneur“.
If you want to know more about what makes Novo Bank an ideal choice for small businesses and side hustles, you better check the video below by Magnified Money. He provided really good insights.
Novo Bank, which was founded in 2016, is a completely digital banking platform that is based in New York City. It is an independent tech company that has partnered with Middlesex Federal Savings, which is a full-service bank based in Massachusetts.
The bank offers a simple product menu that is user-friendly. Furthermore, the bank relies on third-party partners to provide certain business services to make the banking process as convenient as possible for small businesses, entrepreneurs, and freelancers.
Since the bank follows a simple, targeted business model, customers get to enjoy extremely light banking fees.
As mentioned, Novo Bank operates mainly as a mobile banking app and is available on both Google Play and the App Store.
WHO IS NOVO BANK BEST FOR?
Now that you already know what Novo Bank is, this time, let’s talk about who is it best for.
This helps you assess whether Novo Bank is indeed the right digital bank for you.
Novo Bank, as mentioned earlier, is an all-digital bank designed for small businesses, entrepreneurs, and freelancers, which makes it an ideal choice for business owners who are comfortable in managing their money online.
Unfortunately, the bank does not offer every feature that you get from a traditional checking account. However, the bank offers various features for most cashless businesses as well as modern entrepreneurs.
Since it is a digital bank, Novo Bank does not have a physical branch location. So, if you are a business owner who prefers a bank that has a physical branch, then you might have to look for another bank option.
In addition, Novo Bank is ideal for business owners who want to enjoy light banking fees and a product menu that is user-friendly.
To put it simply, Novo Bank is best for small business owners who:
- Prefer to manage their money online
- Do not need cash to deposit cash frequently
- Want a free business checking account without a minimum balance requirement
- Want to use ATM locally and internationally without having to worry about fees
- Want to connect their business checking account to financial tools they currently are using
WHAT ARE THE PRODUCTS OFFERED BY NOVO BANK?
In this part of our Novo Bank review, we are going to tackle the most important detail every customer needs to know — the products offered by the bank.
Unfortunately, Novo Bank only offers checking accounts at the moment. So, if you are looking for a digital bank for small businesses with a wide array of product options, this is not the right bank for you.
So, having said that, let’s take a look at what makes Novo Bank Checking account an ideal choice.
Novo Bank, as we have said, just offers one type of account, and that is a free business checking account.
Unlike other checking accounts out there, this one only requires a small minimum balance to open, and no minimum monthly balance requirement, as well as no monthly fees, to worry about. Also, the checking account does not have hidden fees, which is usually prevalent among other checking accounts offered by other digital banks.
Moreover, the Novo Bank Business Checking Account can be used for different transactions like fund transfers, mail checks, as well as in accepting incoming wires.
Unfortunately, the Novo Bank Checking account does not have its own ATM network, but, what’s nice about it is that the bank refunds all ATM fees charged by other banks.
For your reference, here are some of the best features that come with Novo Bank free business checking account:
- Minimum Initial Deposit. Unlike other business checking accounts, Novo Bank only requires a $50 minimum requirement to be able to open an account. Also, the bank does not require a minimum account balance, as we have mentioned earlier.
- MasterCard Business Debit Card. Your Novo Bank business checking account comes with a Mastercard Business Debit Card, which can be used anywhere MasterCard is accepted. More so, you can use the card at ATM machines to withdraw cash without having to worry about ATM fees.
- Mobile Deposits. The bank allows you to make deposits into your account by simply taking a photo of the check and then uploading it to your account.
- Foreign Checks. Another feature that makes Novo Bank checking account ideal not just for small businesses but freelancers as well is that the bank accepts foreign checks. The checks can be deposited using mobile check deposits in the Novo mobile banking app.
- Send and Receive Funds Via Transferwise. You can transfer Australian, Indian, British, Japanese, Mexican, Swedish, Swiss, and Canadian currencies, as well as Euros through Transferwise without having to pay large transaction fees.
- Digital Wallet Connection. The bank allows you to connect various digital wallets like PayPal, Venmo, Google Pay, and Apple Pay to your checking account.
- Free ACH transfers. Unfortunately, similar to most digital banks, Novo Bank does not offer paper checks. But, the bank offers free ACH transfers. You can have physical checks processed and mailed out directly from the app.
- Xero Integration. If you have Xero account, you can absolutely connect your Novo Bank Checking account with it, which automatically saves your transactions every hour, at the same time, reconciles to your Xero account.
As mentioned, the bank does not charge monthly fees. However, it does charge $27 non-sufficient funds or returned deposited items. Even so, the fee is still below what is usually charged by other banks of a similar type.
HOW TO DO BANKING WITH NOVO BANK?
This Novo Bank review will not be complete if we are not going to talk about how it actually works.
Novo Bank is a digital bank and does not have any physical branches. Thus, just like any other digital banking platform, all transactions including opening an account are done online.
Obviously, you must be a business owner to be able to open an account with Novo Bank. You must have any of the following types of business organizations:
- Sole Proprietorship
- Limited Liability Company (LLC)
- General Partnership
- Non-profit Organization
To open an account, all you have to do is go visit the Novo Bank website and click on the Get Started Button.
Once you click that button, you will be directed to the application process. You will need to input a business email, as well as a password.
Also, to complete the application process, you will be asked to provide your background as well as financial information. The data provided will be used by the bank to determine whether you qualify for the account or not.
Some of the information required to proceed with your application include:
- A valid Social Security number or an employer identification number (EIN)
- U.S. address
- U.S. cell phone number
In addition, business documentation (in pdf, jpg, jpeg, or png file formats.) will also be required. However, the specific requirements will depend on your state of residence and your legal entity status.
Once you get approved for an account, you can now link other bank accounts to your Novo Bank account to easily transfer funds. Also, you can already start accepting ACH payments, depositing checks, and paying your bills using your new account.
To make a deposit to the account, you may do so via ACH, international or domestic wire transfer, or with a mobile check deposit on your smartphone.
In addition, you can withdraw and send money via ACH or send a paper check by mail with the Novo Bank mobile app.
IS NOVO BANK SAFE?
One of the things that people look into when it comes to choosing a bank – in this case, a digital bank – is the security features in place.
Fortunately, just like any other all-digital banking platforms out there, Novo Bank made sure to put in place all standard security and safety features to ensure that customers are protected from possible fraud or identity theft.
Novo Bank employs a dedicated security team and bank-grade encryption to ensure that customers’ personal information is protected around-the-clock.
As with the Novo Bank debit MasterCard, it is protected by EMV technology, which makes it impossible for the card to be counterfeited.
Meanwhile, all Novo Bank account is FDIC insured for up to $250,000 per depositor, through its partner bank, Middlesex Federal Savings.
So, to answer the question, is Novo Bank safe? Yes, it is.
WHAT TO LIKE ABOUT NOVO BANK?
In the previous sections, we have tackled the most important things that every potential customer needs to know about Novo Bank.
Of course, this Novo Bank review will not be complete without us giving you a summary of the things we like about the bank, which include:
- $50 Minimum Deposit Requirement To Open An Account – Unlike other digital business checking accounts, Novo Bank only requires at least $50 to open an account. Definitely low compared to its competitors.
- No Credit Check Required – Novo Bank does not check your credit history when opening an account, which makes it ideal for all business owners.
- No Monthly Fees – Apart from charging $27 for non-sufficient funds and returned deposited items, Novo Bank does not charge any fees.
- No Minimum Balance Requirement – Another plus of Novo Bank is that it does not require a minimum balance in your account, which means, you can withdraw all your money and you do not have to worry about penalties.
- ATM Fee Reimbursements – Novo Bank does not have its own ATM network. But the good thing is, the bank reimburses all ATM fees charged to you by other banks. Needless to say, this applies whether you make ATM transactions here in the United States or internationally.
- Discounts and Credits for Third-Party Business Services – Novo Bank provides valuable discounts as well as credits for third-party services for small business customers.
- Easy-to-Use Online Banking – Apart from the mobile app, which is available for both Android and iPhone users, you can also access your account conveniently on its website.
- Deposit and Send Checks Using the Mobile App – Novo Bank allows you to use mobile check deposits to add paper checks to your account. You can also send paper checks in the mail using the app.
- Free Transfers and Payments – Novo Bank does not charge incoming wires, as well as incoming and outgoing ACH transfers. More so, sending a check by mail is also free.
- Integration with QuickBooks, Xero, Stripe, and Shopify – Another plus point for the bank is that it is integrated with top business tools such as QuickBooks, Xero, Stripe, and Shopify.
WHAT NOT TO LIKE ABOUT NOVO BANK?
This Novo Bank review will not be complete without a list of downsides. In the previous section, we provided you with a list of things to like about Novo Bank. This time, it’s a summary of the things we do not like about it.
The list includes the following:
- Available for Business Owners Only – Novo Bank accounts are only limited to business owners, entrepreneurs, and freelancers.
- No Interest – Unlike other checking accounts out there, Novo Bank checking account does not allow you to earn interest. However, this is totally understandable because of the fact that Novo is not a full-service banking institution.
- No Paper Checks or Outgoing Wires – Unfortunately, most traditional banking features are not available at Novo — and that includes checkbooks and outgoing wires.
- No Integration with Payroll Services – The mobile app does not integrate directly with any payroll providers, which could be a major concern if you have employees. If you have none, this should not bother you at all.
- Limited Products – Unfortunately, Novo Bank does not offer any other products except for a business checking account.
- Does Not Allow Recurring Payments or Direct Deposits – The bank cannot accommodate recurring payments or making direct deposits. It only allows you to receive direct deposits.
- No Cash Deposits – This is definitely not new to digital banking platforms. Similar to most digital banks, Novo Bank does not have a cash deposit option.
FINAL THOUGHTS ON NOVO BANK REVIEW
By now you probably have already figured that Novo Bank is not for everyone. The bank only offers a checking account, which is specifically designed for small businesses, entrepreneurs, and freelancers.
Contrary to other digital banks, Novo Bank does not offer personal accounts or interest-bearing accounts, which makes it even more ideal for a specific sector only.
It is probably safe to say that Novo Bank is very straightforward when it comes to what they offer — targeting a very specific market only, and that is small business owners and freelancers. However, since the bank is relatively new, the possibility of additional products and services in the future is surely just around the corner.
With that said, do you think Novo Bank is the right digital bank for your business?