Novo Vs US Bank — How I Picked A Small Business Checking Account

Choosing the Right Small Business Bank

As an entrepreneur or small business owner, properly managing your finances should be priority number one. The good news is, today numerous banks and platforms are aiming to serve our specific needs.

Many offer low account fees, robust digital tools, and capabilities tailored to modest startups and solopreneurs rather than large corporations. This expanding landscape provides welcome options but can also cause confusion when determining the best fit.

I recommend closely evaluating two leading options — Novo and US Bank. Both are banks I have opened an account with and used.

In this overview, I will compare and contrast these two prominent contenders for your company’s financial relationships through the lens of a seasoned entrepreneur.

About Novo And Their Business Banking

Novo is an online-only bank launched in 2016 that’s laser-focused on delivering modern banking for small businesses and startups. They were founded by two tech entrepreneurs, Michael Rangel and Tyler McIntyre, who shared my pain points with traditional banks. Novo’s mission is to provide an innovative, mobile-first platform tailored to modest business banking needs. Novo also provides 24/7 customer support via chat and email.

Everything Novo offers is optimized for digital convenience, transparency, and affordability. Their flagship product is a free business checking account with no hidden fees, minimums, or nonsense. Novo also provides integrated accounting software, easy digital payments, automated savings plans, and overdraft-free accounts. The customer service experience is also night and day better than that of big banks. When I switched to Novo, I knew I had finally found a financial partner who understood companies like mine.

Pros:

1. Novo provides completely free business checking without any monthly maintenance or transaction fees. This saves me a ton of money compared to other banks.
2. There are no minimum balance requirements to open or maintain a Novo account. I could start with any amount and not worry about fees.
3. The mobile app and online portal allow me to easily monitor balances, transfer funds, deposit checks, and manage cash flow 24/7.
4. Setting up integrations with accounting platforms like QuickBooks took just a few minutes, and everything syncs seamlessly.
5. Whenever I’ve needed support, Novo’s customer service agents are extremely knowledgeable and solve issues quickly.
6. Novo offers helpful accounting tools for invoicing, expense tracking, and financial reporting that provide great visibility into my business performance.
7. Accounts come with free debit cards to conveniently access your funds from any ATM worldwide.
8. Deposits have standard FDIC protection up to $250,000 for peace of mind.

Cons:

1. Novo has limited physical branch locations, so in-person banking options are scarce. You’ll need to rely on ATMs.
2. Interest rates earned on deposited funds are minimal. But you likely won’t use a business checking account for substantial interest earnings anyway.

About US Bank

US Bank is one of America’s largest regional bank chains, with over 3,000 branches across the Midwest and Western states. They’ve been around since the late 1800s and are currently the 5th largest retail bank in the U.S. In addition to standard banking, US Bank provides business lines of credit, corporate credit cards, and treasury management services.

For modest startups and entrepreneurs like me, US Bank offers a variety of affordable small business checking accounts. Their options include free checking without monthly fees if you maintain a $1,500 minimum balance. Or pay-as-you-go plans for lower activity accounts. US Bank’s mobile banking and account management portal seem decent as well. The biggest drawback is that they don’t customize solutions for each small business, so the options are more one-size-fits-all.

Pros:

1. With over 3,000 branches, US Bank provides ample access to convenient in-person banking transactions and customer service.
2. They offer various checking account tiers depending on your monthly transaction volume and balance needs.
3. Mobile and online banking platforms allow you to manage your accounts digitally for convenience.
4. Accounts integrate with QuickBooks and other accounting software to sync your banking transactions.
5. US Bank provides lines of credit and term loans for borrowing needs.
6. They have a wide ATM network and reimburse out-of-network ATM fees.

Cons:

1. Monthly service fees can be $15 or higher unless you maintain elevated minimum balances of $1,500-$2,500.
2. Interest rates earned on deposited funds are quite low compared to online banks and credit unions.
3. Certain accounts limit your monthly debits, checks, and cash deposits before charging additional fees.
4. Customer service hold times can be extremely long when you need support via phone or in branches.

Novo Vs US Bank, How The Business Bank Accounts Stack Up

Opening an Account

Opening my account with Novo took just minutes online with minimal information required. US Bank still makes you visit a branch in person to open business checking, which is a hassle. The seamless digital process saved me time as a busy owner.

Costs

Novo provides totally free small business checking without any hidden monthly or transaction fees. US Bank charges $15 monthly service fees unless you maintain a $1500 minimum balance. I’ve avoided routine banking charges with Novo.

Minimum Balance

Novo allows me to open an account no matter my initial deposit amount — there’s no minimum balance requirement. US Bank forces me to keep at least $1500 deposited to dodge the monthly fees. Novo works better for low-activity accounts.

Linking Other Services

With a few quick clicks, Novo seamlessly connects my accounting platform like QuickBooks. US Bank has limited integrations that take more time to setup and manage. Novo makes my bookkeeping easy.

Interest Rates

Honestly, neither bank pays significant interest rates on checking account balances. But Novo does offer better yields on high-yield savings options, which helps my bottom line.

Data Safety

Both banks utilize standard security and encryption to protect account information. US Bank’s larger size provides more cybersecurity resources, but Novo uses the same protocols.

Accessing Cash

Thanks to its huge branch network, US Bank is more convenient for in-person cash access and transactions. As a digital-focused bank, I rely on ATMs for cash needs with Novo.

Account Selection

US Bank provides multiple checking account tiers based on your activity and balance levels. Novo delivers one free business checking product that works for most modest companies.

Customer Service

Novo’s customer support via phone, email, or chat is much quicker and more helpful than US Bank’s service. I never waste time navigating phone trees with Novo’s friendly team.

Overdraft Policies

Novo avoids surprise overdraft fees by not authorizing overspending on business accounts. US Bank will cover overdrafts for a $35 charge each time if I overspend.

Transaction Limits

Novo allows unlimited transactions so I never worry about caps on payments or deposits. US Bank limits certain activities depending on the account type.

Insuring Deposits

We’re equally covered at both banks since they provide FDIC protection up to $250,000 per business. Our money is safe within coverage limits.

Transferring Funds

Thanks to free ACH transfers and incoming wires, saving money is easy with Novo. US Bank adds fees for certain domestic and international wire payments.

Borrowing Money

Compared to Novo’s deposit account focus, US Bank offers a wider array of business loan and credit products. You will end up with better borrowing options with US Bank currently.

Monitoring Finances

Novo provides very robust reporting and insights for tracking all my financial data. US Bank has standard monthly statements and basic digital tools.

My Problems With US Bank From The Get Go

I chose to open a business checking account with US Bank because they had a branch near my shop. But right from the start, things went wrong.

Despite having an appointment, I had to wait over an hour once I arrived to see a banker. The representative couldn’t get their systems working properly, so my application didn’t go through. I wasted half a day only to leave empty-handed.

When I returned the next morning, they said my application was denied for a higher-tier online business checking account. No reason was given for the denial, but I felt it was because their systems were not working the day before.

Since I still needed a business account, I had to open a basic tier with high monthly fees unless I kept $1500 minimum balance. Between delays in opening the faulty account and maintaining a costly balance, US Bank was costing me money before I even used it.

The headaches continued whenever I called their customer service department. Hold times were ridiculous — once, I gave up after an hour of awful hold music. When I did reach an agent, they had no authority to fix any issues.

After months of paying fees and getting terrible support, I finally cut my losses and closed the US Bank account. Between a sloppy account opening process and ongoing useless service, they made my financial life harder.

Switching To Novo, As A Small Business Owner

After the endless headaches I endured trying to open an account with US Bank, switching to Novo Bank was easy.

Their 100% digital account opening process took just a few minutes using my phone. Novo only asked for basic details about my business to get up and running, a stark contrast to the piles of paperwork and hassles I dealt with at my US Bank branch.

I could fund my new Novo account right away without needing to deposit some unreasonable minimum balance amount. No surprise requirements popped up last minute like I dealt with before.

Best of all, Novo provided completely free business checking without all the confusing monthly service and transaction fees I was saddled with at US Bank. Novo’s simple, transparent pricing was a big relief.

The excellent service continued after opening my account. When I ran into an issue verifying my employer EIN, Novo’s amazing customer support fixed things quickly.

I chatted with a friendly rep named Wendy, who instantly knew how to resolve the EIN problem and get my account fully activated. At US Bank, I would’ve been bounced between departments and sat on endless hold trying to get basic assistance.

What It Took To Switch Banks. A Simple Change

After yet another frustrating call with US Bank’s customer service trying to resolve simple issues, I decided enough was enough — it was time to switch banks.

While the prospect of moving accounts seemed daunting, Novo Bank made the entire transition a breeze. Here’s how painless it was to transfer my business banking:

First, I applied online to open a Novo small business checking account, which took less than 10 minutes to complete using their user-friendly site.

Next, I linked my old US Bank accounts to my new Novo account and scheduled automatic transfers to pull my balances over. With a few clicks, my funds went to my new home.

While the transfers were being processed over the next few days, I printed Novo’s easy account closing request form. I filled it out and handed it to my useless US Bank branch.

The US Bank rep tried to convince me to stay, but between their poor service and high fees, I happily said my goodbyes. They rebated the last service charge and closed the accounts without any hassle.

All my account balances were fully transferred to Novo Bank within one business week. I shredded my US Bank checks, cards and paperwork. My business finances now had a clean start at a much better banking partner.

The streamlined process showed that making a complete banking switch doesn’t need to be an ordeal. Novo’s online tools and responsive support made the transition faster than I imagined.

I’m kicking myself for not ditching my old bank sooner.

Wrapping This Experience Up

Picking the right bank for your small business can be tricky — you’ve got to consider what features matter most.

Do you need no monthly fees? High interest rates? Easy mobile apps? Lots of locations for cash? The best option depends on your priorities.

After personally trying US Bank and being disappointed, I recommend Novo Bank to fellow entrepreneurs.

Novo provides free business checking without any monthly fees or balance minimums. This saves you money to invest elsewhere.

Their website and mobile app are user-friendly too. Novo makes managing your finances simple and fast digitally.

If your business needs straightforward, no-fuss banking that won’t nickel-and-dime you, give Novo a look. They offer the perfect solution for most lean startups like mine.

Bottom line — I think any small business owner frustrated with their current bank should check out Novo. Their modern approach makes your financial life easier.