With most financial institutions having mobile banking apps and many transactions taking place online, many consumers and business owners have warmed up to online banks. The funds deposited via these entities have the same FDIC insurance protection that makes traditional banking attractive. As the lines get blurrier between traditional banks and online banks, it’s worth considering if you can use an online banking solution for your business.
Many of these online banks have better APYs for savings accounts that have higher yields than most dividend stocks. In addition, these banks typically allow business owners and consumers to save money because they have far less overhead than banks with brick-and-mortar branches, staff for each of those buildings, and the costs of owning and maintaining those properties.
Novo and Bluevine are two online banking solutions that help business owners create checking accounts with great perks, integrations, and features. An account with either of these mobile banking solutions can be great for your business. Still, you should assess each app’s nuances and your financial needs and objectives before getting started with a banking solution. We will provide a comprehensive analysis of what Novo and Bluevine offer and give you a better perspective on which one makes more sense for your business.
What is Novo?
Novo provides business banking services to small business owners, freelancers, and startup founders. The company is on a mission to change how businesses bank everywhere. Like many online solutions that give customers access to banking solutions, Novo is a fintech company, not a bank. Through their partnership with Middlesex Federal Savings, Novo can provide business owners with business checking accounts. You can get a business checking account from many banks, but Novo’s platform and features make it desirable for many small business owners. Novo currently serves over 190,000 small business owners and has been around since 2016. Middlesex Savings Bank has been in business since 1890.
What is Bluevine?
Bluevine provides simplified services that make it easy for small businesses to get started with business banking and embrace its benefits. The company launched in 2013 to provide better business banking solutions in response to traditional banks underserving small businesses. Bluevine is a financial technology company that provides business banking services through its partnership with Coastal Community Bank. This partnership allows consumers to create business bank accounts that are FDIC insured. While a bank account on Bluevine’s platform offers several advantages, FDIC insurance should be a requirement in your criteria. It’s the best and most standard protection you can get from banks. Bluevine currently serves over 425,000 small business owners. Bluevine has been around for roughly a decade (founded in 2013), while Coastal Community Bank got started in 1997.
Novo vs. Bluevine: Comparison & Details
Novo and Bluevine are both top choices in the online business banking industry, with rapidly growing user bases and market opportunities. The checking account and platform you use for your business are more than just a place to store cash you receive from customers and handle expenses. Getting set up with the right online banking platform can save a lot of time with integrations and provide discounts on popular business tools and resources. Here’s how Novo and Bluevine compare with each other.
Service Charges and Fees
Like many online banking solutions, Novo and Bluevine nixed many of the fees you’ll find at traditional banks. There’s no opening deposit fee or minimum balance requirement for either fintech company. Both companies also offer vast ATM networks. Bluevine has a partnership with MoneyPass that allows business owners to make fee-free transactions at over 37,000 ATMs. If you use your Bluevine debit card at an ATM outside of the MoneyPass network, you will incur a small fee.
Novo refunds all ATM fees at the end of the month, even the out-of-network and international fees. International ATM fees can get pricey at 1% to 3% of the transaction amount. If you use ATMs often, Novo and their debit card will help you save money on fees. If you have to pay ATM fees with another bank, you can make less frequent ATM transactions and deposit or withdraw larger sums of money. ATMs charge per transaction instead of a percentage of the transaction (excluding international fees), so you could save with fewer transactions of larger amounts.
You also won’t have to worry about monthly or annual fees if you create an account with Novo or Bluevine. Novo has a $27 insufficient funds fee, and if you opt for an Express Transfer, you’ll get charged 1.5% of the transaction. This arrangement has a $0.50 minimum and $20 maximum, but you can opt for a standard ACH transfer and not worry about this fee.
Bluevine has some fees to keep in mind. Their cash deposit fee is $4.95 per transaction, and you’ll have to pay $1.50 for each outgoing check through Bluevine Bill Pay. However, Bill Pay makes it easier to pay your entire team, and some companies have higher fees, sometimes equal to a percentage of the transaction. Bluevine also has no overdraft fees if you overdraw your bank account.
Business owners don’t do banking with Novo or Bluevine for the APY on their checking accounts. Novo does not offer interest on their business checking accounts, making Bluevine better by default. Business owners can secure a 2% APY on funds they leave in their Bluevine checking accounts. Bluevine does not have a minimum balance requirement for the 2% APY to take effect, but you can only earn this interest rate of up to $100,000. That means a business owner can make up to $2,000 through interest each year. It’s a similar yield to most dividend stocks without market uncertainty.
You could create a personal savings account with another bank and then use Novo or Bluevine for your business finances. Keeping your personal and business finances separate is also a good policy to make the tax season less complicated and protect your personal assets in case your company gets sued.
Novo and Bluevine provide debit cards you can use to take money out of any ATM. While Bluevine has a smaller ATM network than other banks, which can mean more fees, Novo refunds all of your ATM transactions for any out-of-network ATMs at the end of the month.
While you can easily take cash out of ATMs with a Novo or Bluevine debit card, these online banking solutions aren’t the best for depositing cash. Novo doesn’t let you deposit cash into an ATM, while Bluevine charges a $4.95 transaction fee for each cash deposit at an ATM. If your business relies on cash and must make frequent deposits, you may be better off with another bank. However, small business owners that do most of their transactions online can more easily overlook this disadvantage.
It’s possible that these fintech companies will address issues with cash deposits in the future. For example, Novo used to require a $50 minimum opening deposit to get started but removed that requirement. Similarly, Bluevine used to have a 1.5% interest rate for their business checking accounts but has since bumped it up to 2%.
Novo and Bluevine each offer numerous integrations with popular business tools in accounting, e-commerce, payment processing, and operations. They both offer integrations with essential tools for your business. These integrations let you perform critical activities for your business within a single platform, allowing you to save time in the process.
Novo and Bluevine use several protocols, such as two-factor authentication and encrypted data, to keep small business owners safe. They also have identity theft monitoring services to alert you about suspicious activity and help you remedy the issue. Both fintech companies let you freeze your debit card online with a few clicks if it gets misplaced or stolen. You won’t have to jump through several hoops and wait for a representative to answer your call or email. However, if you want to email or call a representative at either fintech company, they are happy to help.
Mobile apps are standard for the online banking industry. Financial institutions have adapted to offer their own apps. Many banks have smooth interfaces that are easy to navigate, including Novo and Bluevine. It’s easy to find screenshots and brief videos that walk you through the mobile app interfaces. You may have a small learning curve, but these apps get easy to use in a short amount of time.
Both fintech companies offer email and phone support to address your questions. Both companies highlight their customer support, but it’s a standard practice to highlight good customer service. Reviews tell a better story since reviews are a collection of customers’ thoughts about a company, product, or service. Novo has an average rating of 4.8 stars in the App Store spread across over 12,000 reviews. The fintech company also has over 3,500 Google Play reviews that average 4.5 stars. Bluevine has over 1,500 reviews in the App Store, and Google Play combined, averaging 4.5 stars. The reviews indicate many customers enjoy the company, including the customer support teams for both online banking solutions.
Other Perks and Services
Novo and Bluevine offer additional features that help them stand out from other online banking solutions. We have included some of them below.
- Novo Boost: You can receive the funds from a Stripe payment in hours instead of a few days. This advantage can minimize cash flow issues. Novo Boost makes it easier to address immediate expenses and make investments in your company.
- Novo Reserves: Novo Reserves let you store cash in multiple accounts instead of keeping everything in the same account. Reserves help you group funds based on expenses. It’s a good idea to have a Novo Reserve set up for your taxes so they don’t catch you by surprise.
- Discounts and Savings on Business Tools: Novo provides thousands of dollars in savings when you use popular business tools. Stripe users get $5,000 in fee-free card processing, Gusto members get the first month free on any package, and you can receive a $500 Google Ads credit if you spend $500 on Google Ads with your Novo checking account. Those benefits barely scratch the surface of what Novo has to offer.
- Integrations: Novo offers a large variety of workflow solutions with popular payment and accounting platforms, such as Shopify, eBay, Woocommerce, Etsy, Stripe, Quickbooks and Zero.
- Access to a line of credit: Bluevine’s credit line is an attractive option for businesses that need financing, whether for short-term expenses or long-term investments. Business owners can borrow up to $250,000 with an interest rate as low as 6.2%. You also won’t have to wait long for the final verdict. Bluevine lets you know if you’re approved or not within five minutes. Receiving an offer does not hurt your credit score. Bluevine only initiates a hard credit inquiry if a business organized as a sole proprietorship or general partnership accepts the offer. If your business is an LLC or corporation, Bluevine will not perform a hard credit check at any point in the process, meaning your business credit score won’t get affected by a need for capital.
- Sub-accounts: Bluevine also offers sub-accounts that resemble Novo Reserves. These sub-accounts let you group your finances so you can allocate funds for specific expense categories.
- Bill Pay: This feature makes it easy to pay all of your bills with a few clicks. Bill Pay makes it easier to manage business expenses so you don’t fall behind.
Where Does Novo Stand Out?
Novo offers superior perks for their account holders who want to save thousands of dollars on the most popular business tools and advertising platforms. You also get more business integrations with a Novo account than with a Bluevine account. If you find yourself using many business tools or want to get started with online advertising, the savings you’ll find at Novo can make it a better option than Bluevine. If you use ATMs to withdraw cash often, Novo is a great choice due to its vast ATM network and fee reimbursements for out-of-network ATMs.
Where Does Bluevine Stand Out?
Bluevine provides an APY for money sitting on the sidelines, and their credit line option lets you borrow up to $250,000. Businesses that want financing and extra interest may prefer to use Bluevine for their online business banking. Novo and Bluevine aren’t the best with ATM cash deposits, but Bluevine is better in this area by default, but you will have to contend with a $4.95 cash deposit fee for each transaction. Withdrawals are free as long as you use ATMs that are a part of Bluevine’s ATM network.
How to Open a Novo Business Account
A Novo (*) business checking account has great software integrations and can help your business get started. You can visit Novo’s website and fill out their application to apply for an account within a few minutes.
How to Open a Bluevine Business Account
Bluevine accounts have decent APYs and the ability to take out a line of credit. If you want to create a Bluevine business checking account, you can visit their website and click the “Get Started” button. Bluevine will then let you choose between creating a business checking account or taking out a line of credit for your company.