We’ll help you choose between Kabbage and Novo checking accounts.
Novo and Kabbage, which one is the right checking account choice for your business? SMBs are understandably interested in the banking solutions both of these firms offer. But which one should you choose? To help you make the right choice, read our detailed comparison below.
Kabbage vs Novo: Summary comparison
The comparison table provides an overview of these two business banks.
|Service type||Business checking account||Business bank account|
|Year of formation||2008||2016|
|Prices (from)||$0 per month||$0 per month|
|Number of clients||200,000||150,000|
Kabbage is a direct lender founded in 2008 and based in Atlanta, GA and their checking account is available in all 50 U.S. states. Backed by Green Dot Bank, Kabbage offers a very attractive checking account with no monthly fees and access to Kabbage Funding. In addition, American Express purchased Kabbage in 2021.
Novo is a direct lender founded in 2008 and based in Atlanta, GA and their checking account is available in all 50 U.S. states. Backed by Green Dot Bank, Novo offers a very attractive checking account with no monthly fees and access to Novo Funding. In addition, American Express purchased Novo in 2021.
Kabbage and Novo similarities
Both Kabbage and Novo are online business accounts with no physical branch locations, not banks. They are registered with the Federal Deposit Insurance Corporation (FDIC) via their parent banks meaning customers’ accounts are FDIC-insured to the maximum allowable limits.
Both banks offer lending products to businesses and Kabbage doesn’t charge for incoming domestic wires and gives you fee-free access to in-network ATMs. In addition, Kabbage does not charge out-of-network fees for cash withdrawals whilst Novo customers have free ATM access to over 19,000 in-network ATMs.
With Kabbage and Novo, you have:
- An online business bank account
- No monthly fees, overdraft fees or minimum balance fees
- Bank card
- Mobile application
On the services side, Kabbage and Novo both offer direct integrations with accounting software such as Quickbooks, allowing customers to easily sync data like bills, transactions, and payees between the two platforms. Both banks don’t have any opening deposit requirements, transaction limit fees or ACH fees.
Note: With these two service providers, becoming a customer is quick and easy. Your online business bank account can be opened in minutes.
Their interfaces are online on the web or on via their mobile applications which are intuitive and easy to use on a daily basis. Kabbage and Novo are aimed at professionals, SMBs, sole proprietors and the self-employed who are looking for a simple and affordable banking solution.
Kabbage and Novo differences
Now we’ll take a look at the differences between Novo and Kabbage. The following table provides a summary of these differences.
|APY||1.1% on balances of up to $100,000||Not available|
|ATM Fees||Free for out-of-network ATMs; however, operator fees apply. Free access at 19,000 in-network ATM locations||No out-of-network ATM fees. Novo reimburses fees charged by ATMs worldwide.|
|Checks||Free mobile check deposit||Can’t write traditional checks. Users can have checks sent to them via the mobile app|
|Domestic Wire Transfer Fees||$25 for outgoing domestic wire||Novo accounts can receive domestic & int’l wires but can’t send domestic wires via their Novo account|
|Promotion||SEE THE OFFER||SEE THE OFFER|
There are a number of differences between these two bank accounts that will help you decide between them and make your choice.
Novo doesn’t have any APY interest bearing account whilst Kabbage customers can earn 1.10% APY on account balances up to $100k. No interest is earned on aggregate balances of over $100k.
Kabbage doesn’t charge for incoming domestic wires and gives you fee-free access to in-network ATMs. In addition, Kabbage does not charge out-of-network fees for cash withdrawals—although the ATM operator may charge a fee.
Instead of domestic wires, Novo offers ACH transfers that are fee-free and can be made through the Novo app. Now that we know more about the similarities and differences between the two banks, let’s take a closer look at the details of the Kabbage and Novo offers.
Kabbage vs Novo: Pricing, plans & services
Even if the two banks are aimed at small business owners and freelancers, there are some differences when it comes to the overall pricing, plans and service. Here is some information on the offers of Kabbage and Novo.
|Number of accounts||Up to 5 accounts||1 account|
|Cash Deposited||$4.95 fee per transaction, available through Green Dot retail locations||Not provided|
|Monthly transactions||Unlimited e-transactions (ACH transfer, online bill pay, direct dep., mobile check dep)||Unlimited fee-free transactions, no ACH transfer fees and no incoming wire fees|
|Line of credit||Up to $150,000||None|
From a monthly fee perspective, both Kabbage and Novo are very competitive with no fees for setup and maintenance and an unlimited amount of daily transactions. Novo users can deposit checks into the account using the mobile app whilst Kabbage customers can deposit checks in your account within the mobile app on your smartphone.
Novo don’t provide any cash deposit facilities however Kabbage do and cash deposits can be made at CVS, Walmart, Walgreens with drops of up to $5k cash/day at 90,000 locations for $4.95 per deposit. Both banks also do not charge any monthly fees, or transaction fees.
Kabbage and Novo are two very good bank accounts for small businesses with both offering some forms of credit access to businesses.
Novo Funding offers access to a commercial line of credit and each draw on the line of credit is a separate 6, 12, or 18 month installment loan depending on your eligibility and loan amount. The minimum 6-month term loan you can draw is $500, the minimum 12-month term loan is $10,000 whilst the minimum 18-month term loan is $20,000.
With Kabbage Funding, you can apply for a Kabbage business line of credit up to $150,000. If approved, you can manage your account and repayments through the Kabbage dashboard. The Kabbage Funding application can get you approved for a line of credit quickly. All you need to do is provide your business information, bank account info and personal information.
Payment and collection methods offered by Novo and Kabbage
Here is a comparison table of payment methods offered by Novo and Kabbage.
|Checks||Yes||Yes, via the mobile app|
|Wire transfers||Yes, with a $25 fee||Can’t send domestic wires via the Novo account|
|International wires||Yes, with a 3% transaction fee||Send payments internationally via Wise|
Means of collection
Here are the payment methods available with these two accounts.
|Wire transfers||No fees for incoming domestic wires||Yes|
|International transfers||Yes, with a 3% fee||Yes|
Kabbage customers can conduct foreign transactions with a fee of 3% of the total transaction amount whilst Novo customers can’t send international wires directly however a workaround is available via an integration with Wise.
Kabbage vs Novo: How to choose?
Both Kabbage and Novo both offer attractive yet different online business checking accounts. So how should you make your choice? Here are the main things to keep in mind when making your choice:
- Services: Depending on your needs, some business checking accounts are more suitable than others. Kabbage stands out with its high APY of 1.10%, no monthly fees, integrations with Quickbooks, no transaction limits and in general excels at the basic banking services for small businesses, bolstered by its parent owners American Express. Novo also offers a wide range of services with no monthly fee and few other fees and an ability to send unlimited, personalized invoices and accept online payments.
- Line of credit: With Kabbage Funding, you can apply for a Kabbage business line of credit up to $150,000 with a line of credit quickly accessed whilst Novo works with other lenders and organizations to help provide loans for businesses.
- International transactions: Are you going to be making any or indeed a lot of them? If you are, you should be aware that this is possible with Kabbage albeit with a 3% transaction fee whilst Novo customers can’t send international wires directly, however a workaround is available via an integration with Wise.
- Other: Apart from the above, Novo customers have free ATM access to over 19,000 in-network ATMs whereas with Kabbage, you can withdraw cash for free at any ATM in the Kabbage network. Use the ATM locator in the Kabbage mobile app to find locations near you and ATM withdrawals are limited to $2,000 cash in a day.
For further information:
To discover all the business bank alternatives, feel free to take a look at our business bank account comparison.
Is Kabbage a good checking account?
Kabbage is a good checking account offering a user-friendly interface with innovative features, no monthly fees and unlimited ACH, no international wire fees, a strong APY of 1.10%, no monthly fees and integrations with accounting software such as Quickbooks.
Is Novo a good checking account?
Novo is indeed a good checking account offering a user friendly interface with innovative features, no monthly fees, a range of integration options and is ideal for freelancers, startups, and self-employed.
What are the alternatives to Kabbage and Novo?
Small business owners will find suitable banking solutions with Bluevine, Relay or indeed Chase, the largest bank in the U.S. In addition, Bank of America and Capital One also offer decent banking solutions.
Tom is the founder of Gottagrow.io. He reads the offers, deciphers the details including features, pricing, included services and more to find you the best products and services.