‍Novo, founded in 2015, is another of the leading neobanks in the space and aimed at startups and online businesses. Technically they aren’t a bank (they partner with Middlesex bank) but they offer everything you’d expect from a modern bank (deposits, wires, ACH, etc.). The pros column is that Novo is a digital first bank that has no monthly fees, no minimum balance requirements, no transaction fees and no incoming wire fees. Additionally, they work with third parties like Stripe, eBay, and Etsy better than most traditional banks. They lag some banking rivals in their perks: they don’t offer any interest on deposits or any cash back/points on debit card spend. Novo falls behind the recommended bank Mercury in integration with QuickBooks as some users have had problems with it (although Novo is improving in this area), and hasn’t yet developed the ability to set up recurring bill payments or phone support. Additionally, Novo doesn’t allow you to make international outbound wires and you will have to send money abroad through ACH transfers instead. Novo’s FDIC insurance limits are lower at $250k than Mercury’s. Novo is a good option for online business banking, 

Novo features

They consist of:

Easy sign up process

This straightforward signup process with Novo gives a nod of approval. Novo bank account applications take less than 10 minutes. When you apply for a Novo bank account, you will not run your credit and it will not impact your credit score. 

To be able to have a Novo account, you must have:

• A copy of your signature personal identification (ID or Passport).
• A mobile phone number with a major US carrier.
• A US Social Security number.
• A US mailing address.
• And be at least 18 years old.

‍LLCs will also need:

• A copy of the Operating Agreement.
• A copy of the Articles of Incorporation.

‍Invoicing

Novo stands out with their invoicing product. Instead of leveraging a third party accounting software to make an invoice (as with Wave), Novo users can do it directly from their banking platform. It will save freelancers and others time and effort.

No fees

Whereas other banks do charge a monthly fee for their business checking account, Novo does not. Additionally, they don’t have minimum balance requirements and don’t charge transaction fees or incoming wire fees. In addition, they have no fees on incoming or outgoing ACH transfers. Novo also lets you send physical checks for free (not from a checkbook: you mail the checks with their digital banking platform). They also provide free mobile check deposit. They also do not levy fees on ATM withdrawals. Additionally, they will refund fees up to $7 per month on ATM fees levied by other banks and ATM owners. It enables you to use any ATM worldwide without paying for ATM charges. A great perk.

Novo Integrations

Novo meshes well with third parties like Stripe, Square, Gusto, eBay and Etsy, unlike traditional banks. Unfortunately, since Novo started offering a financing product, they do not have a direct integration with Shopify anymore. The integration with QuickBooks was also apparently buggy, some customers complained.

Novo drawbacks

Some of the disadvantages include:

‍Cash back/points

Unlike many other debit cards, Novo does not offer cash back or points on spend on the Novo debit card. Additionally, it’s recommended that the Capital One credit card, in addition to a Novo bank account, be used to take advantage of these bonuses.

‍Interest on deposits

Novo does not pay any interest on deposits held in Novo savings or checking accounts. However, they don’t provide a treasury product like some of the competition, like Mercury, which allows you to earn interest on your deposits. Don’t recommend Novo if you need to maximize interest on your deposits. 

Nit picks

Fees for insufficient and uncollected funds returned ($27) will apply by Novo. Whereas Mercury does not have outbound international wires, you should use ACH transfers to send money internationally with Novo. The Novo integration with QuickBooks also raised some users. Novo also doesn’t have a recurring bill payment feature or phone support.

Novo pricing 

Novo is free to use. There are no monthly or annual fees or transaction fees. They earn interest on the money that they have deposited from your deposits. They offer 0% interest on savings accounts and reinvest the deposits in assets that generate yield and keep the interest. Most banks make money this way, but other banks will also charge fees for their services (money wires, etc). That Novo doesn’t charge those fees is something most users want.

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