Novo vs Lili for Business Checking 2024: Which One is Better

A checking account is a transaction account that allows you to deposit and withdraw cash. Also known as a transactional account, it allows electronic transfers or purchases in person or online. Generally, checking accounts are mainly used to cover daily expenses like medical bills, rent, and utility. 

Regardless of where you’re sourcing your money, crypto, stocks, or other investments, the right banking tool is fundamental to your financial game plan. So, which of the two Novo Vs. Lili Business Checking 2024 brings your financial game plan to completion?

On the one hand, Novo is a business checking vendor that provides a streamlined banking experience that is suitable for small businesses. Lili, on the other hand, is a freelancer-friendly business checking with built-in accounting and tax perks with a no-fee promise. But which of these two, Novo and Lili, deserve a spot in your financial game plan?

Both Novo and Lili are among the top business checking providers tailored to serve small businesses and freelancers. They offer fee-free services and are easy to integrate with popular business software such as Shopify, QuickBooks, and PayPal. 

Foundeck will in this post look into both Novo and Lili to break down their features, strengths, and weaknesses. A deep understanding of the two will enable you to make informed business decisions that align with your objectives. 

How Do Checking Accounts Work?

Checking or transactional accounts serve your short-term money needs. You can deposit money via checks, cash gifts, direct deposits, or transfers into these accounts. 

You can also withdraw money using checks, ATMs, electronic transfers, or a debit card for in-person or online purchases. Additionally, you can also set up automatic bill payments to be settled from your checking account.

An Overview of Business Checking Accounts

When you launch a new business, it’s vital to separate personal and business finances or assets. Setting apart personal and business funds protects your assets in case the business gets into financial or legal trouble. 

Mixing personal and business finances puts your finances and assets, like your house or car, at the risk of losing them, which can leave you in a destitute situation. However, splitting the two (personal and business) helps you mitigate the risk as you limit personal liability.

So, how do you achieve the separation of business and personal finances? To separate your personal and business finances, you need a business checking account to hold your business financials. All your income flows into your checking account, while cash flows out of the account to pay expenses. The deposits and withdrawals keep your checking account infinitely simpler while saving you time to prepare for taxes.

What is Novo?

Novo Bank is a business banking platform built to serve online entrepreneurs and creators. Technically, Novo isn’t a bank, as it doesn’t hold your money but a platform that provides a creator-friendly interface and features suitable for businesses to exchange cash.

The money Novo Bank users deposit in their accounts is held by the Middlesex Federal Savings. The bank has been in existence since 1890.

Novo offers a unique system to entrepreneurs who want an online-first banking service that allows them to manage their cash flow on the go. Regardless of your financial needs, as a Novo user, you’ll never have to visit a branch to find a solution. 

The platform offers all services online and has no physical branch. Anyone looking for a simple and streamlined way to manage a business’s finances should consider Novo as it’s fashioned to offer just that.

Who Does Novo Suit?

Novo is an all-in-one banking service for freelancers and small businesses. It offers up to 20 Reserves, unlimited app integrations, and free unlimited invoicing. However, Novo doesn’t accept cash deposits, and there’s no monthly fee.

With its online approach to banking, Novo targets freelancers and small businesses. They don’t charge a monthly fee, and you don’t have to maintain a minimum balance, but you only focus on running and building your business. 

Novo comes with unmatched perks like a user-friendly app to manage your finances on the move, a free business debit card, and a virtual one to ensure secure online transactions. Other notable features include sending and receiving Automatic Clearing House (ACH) transfers, issuing checks, and drafting client invoices.

Another standout feature is the seamless integration with the tools already in place. Novo can connect Stripe, PayPal, Amazon, Square, or Shopify for swift and easy payments. Novo is your all-in-one small business banking hub that keeps your financial functions cost-effective, convenient, and fee-free, unlike traditional banking.

What is Lili?

Lili is a financial company with levels of checking accounts for small business owners and freelancers like independent contractors and sole proprietors. It’s an online platform that provides a free banking services plan for small businesses and three paid plans.

The Lili business account has different features and tools that depend on the plan you’re running. However, to access the best features of Lili, you need to pay a monthly fee.

As a comprehensive financial management platform, Lili operates as a FinTech solution that partners with regular banks. Lili provides a business checking account that doesn’t require monthly fees or a minimum balance. 

Lili is accessible on a user-friendly mobile app, allowing the user to manage it on the go. The account comes with a Visa business debit card to allow you to complete daily transactions with ease. Lili’s software automatically groups expenses to streamline financial organization and ease of operation.

Besides its basic banking functionality, Lili integrates with invoicing tools, streamlining client billing and bookkeeping features. Plus, it also makes it easy for you to prepare for taxes by issuing automated reports and pre-filing tax forms.

Any business owner looking for a centralized platform to manage business finances should consider the services of a Lili banking account. 

Novo Bank Features

Novo provides rapid access to funds and quick payments. The Novo bank allows users to access their income and process payments within hours. Here are the main features of the Novo business checking account:

1. Free Business Checking Account

Novo stands out for its core feature, which eliminates hidden bank costs and the need to pay monthly fees. The account is free to open and maintain, and you can close it at will. Compared to other business checking accounts, Novo lacks a monthly maintenance fee and hidden costs, which makes it an outstanding choice. Novo prioritizes affordability to allow business owners to grow their businesses.

2. Novo Reserves

Novo allows users to set up reserves within their Novo account: it involves segmenting funds into separate sub-accounts. The feature is useful as it helps to set aside tax money. The Novo reserves are user-friendly, and you can set up different accounts in seconds, including one for your tax money. From every paycheck, you can apportion some of it to the reserve so that when the tax period arrives, you have enough money to pay the IRS. 

3. Cash Back Perks

Novo clients can take advantage of the various discounts from popular companies. They include popular online merchants where businesses spend regularly. Currently, some of the brands Novo users can get discounts and free credits from include:

• Zendesk
• Google Ads
• Quickbooks
• Stripe
• Snapchat Ads
• GoDaddy

As a Novo user who uses any of the above services, do you get to save thousands of dollars? Novo free offers. 

4. Novo Bank Integrations

Novo users can integrate their accounts with various popular services. The integration allows users to streamline their business finances without the need to log in to their Novo Bank account regularly. Currently, Novo integrates with the services below, but the situation can change anytime, so you need to check before any action:

• Shopify
• Xero
• Slack
• Zapier
• Stripe
• Quickbooks

Taking advantage of these integrations can bring together all your business financials in one place and then send update alerts to your team when a significant deposit hits your account.

5. Accessibility

You can manage your finances on Novo’s user-friendly mobile app on the go. Make check deposits, transfer money, and track your account activity from any device, including your smartphone or tablet.

6. Early Stripe Payouts

If you receive money via Stripe, you’re in for a treat. Novo users who receive business payments through Stripe can get their payouts a business day earlier. What you have to do as a Novo user is to connect your Novo bank account to your Stripe account. 

Once you do this, Novo deposits your Stripe payouts into your account early. Although the early payouts might not seem like a big deal, cash flow speed is vital to some businesses. The early payouts are important if you’re looking to reinvest a significant portion of your revenue back into the business. In such a situation, accessing your cash a day earlier can make a huge difference.

Novo Pros and Cons

When to Use Novo

Novo is the banking solution you’ve been waiting for, as it enables you to say goodbye to chasing your cash flow all over different platforms. By connecting to the tools you love and spending more time doing what you enjoy, you should also pay for other activities in peace. 

Novo is free for everyone to use; it allows you to connect different tools and centralize your business. When should you use the Novo business checking? Use Novo Bank when in need of the following: 

1. Faster access to funds from your revenue source. Novo Boost feature gives you access to your payments received from Stripe in hours instead of days. The platform has plans in the pipeline to expand the boost feature to cover other payment sources like Shopify and PayPal. Lili has no similar features.
2. Fee-free invoicing software. As a Novo user, you can access its invoicing software free of charge and also receive several embedded payment options. In comparison to Lili, its invoicing software is only for subscribers of the Lili Smart and Lili Premium at $21 and $33, respectively.
3. Discounts on business solutions. Popular business tools like Stripe, Quickbooks, Google Cloud, and Hubspot offer Novo Perks discounts and credits, saving users much money. Its competitor, Lili, doesn’t offer incentives to its users. 
4. Fast access to small business funding. Novo Bank has a Novo Funding program that allows customers with a six-month banking history to borrow up to $75,000 of Merchant Cash Advance (MCA). After applying for the money, it's reviewed within 24 hours, and if approved, the entrepreneur can access and use the funds immediately. Meanwhile, Lili has yet to offer such offers or lending programs. 

How to Create a Novo Account

The process for opening a Novo Bank account is straightforward. You must be of legal age (18 years) and above, a US citizen or permanent resident, and own a business in the US. If you’re a sole trader, you must be a US citizen. Follow the simple steps below to open your Novo business checking account:

1. Go to the Novo website.
2. Click on Get Started. 
3. Type your business email and create a secure password. 
4. Provide your Business Information
5. Click on the Submit button and wait for a response.

Once you submit your Novo application, they will respond with an approval message or request for more information through the email you provided. There’s nothing to worry about when they ask for more information, as all they’ll be doing is trying to verify your business. 

Verifying your business is only to confirm the business is legit and truly exists. Once the Novo team is satisfied with your information, they’ll approve your application in several hours. Novo can’t reject your application as long as your business operations are legitimately compliant with the law and Novo’s terms of operation.

Lili Features

As a business owner, you have many financial institutions at your disposal. However, knowing what sets them apart can be useful for you in making a better decision for your business. 

Lili Bank offers a few varying account types that go beyond typical banking. Although Lili markets itself as a bank, in reality, it’s a financial tech company. Let’s break down Lili’s features that make it stand out and uncover why it might be a good fit for you.

1. Fee-free Banking

The most enticing thing about Lili Bank is the fee-free banking experience. Everyone loves free, right? The service is most favorable to sole proprietors or small business owners, as they can access essential banking services without paying hefty fees. Lili users enjoy unlimited transactions, and no matter where you make purchases, foreign or within the US, there are no transaction fees. However, you’re charged for using out-of-network ATMs.

2. Fee-free Overdraft Protection

Lili Pro subscribers are cushioned from unexpected moments by fee-free overdraft protection from BalanceUp. The overdraft protection is fashioned to keep users afloat at the time of need. Although overdrafts aren’t diligent financial decisions, you can overdraft up to $200 on your Visa business debit card. 

3. Visa Debit card

Once you open a Lili business account, they’ll issue you with a secure and convenient Lili debit card. You can use the debit card to settle your business expenses and cash withdrawals anywhere. The digital card can be added to your digital wallet.

4. Automatic Tax savings

The tax season can be stressful if you aren’t prepared beforehand. How do you prepare? As a Lili user, take advantage of Lili’s Tax Bucket feature and automatically set aside a small portion of your income so that you don’t scramble to save for taxes. Lili’s tax bucket comes in handy as it helps users remain tax-savvy and avoid surprises when the tax season is ripe. For more convenience, you can classify your transactions into tax groups to receive pre-filled tax forms.

5. Mobile App Banking

Professionals appreciate the convenience of banking on the go, which Lili delivers through its user-friendly mobile app. All activities you carry out on the mobile app are swift, and you can monitor your financial progress with a few clicks. Whether you’re traveling or between meetings, the Lili app keeps you close to your money.

6. Real-time Expense Tracking

Every time you swipe your card, Lili records automatic financial reports and classifies every transaction for tax purposes. The real-time expense tracking saves you from transferring data from the bank and Lili for bookkeeping purposes. You categorize all transactions at your fingertips. 

7. Invoice Management

Lili has professional invoicing software that allows users to manage invoicing in one place. On the Lili app and platform, you can send, monitor, and customize invoices. Additionally, you can also accept invoice payments through different payment methods. Lili is a convenient, one-stop solution for users to stay on top of their account receivables and get paid quickly.

Lili Pros and Cons

When to Use Lili

Lili is your banking, accounting, and tax solution, where the three work seamlessly as one to allow entrepreneurs to scale confidently. The platform’s bill pay solution and invoicing software keep users in control of their cash flow, allowing them to make business payments smoothly. As a result, your business operations run smoothly. So, when is the ideal time to seek Lili’s services? Here are such situations:

1. Need assistance with tax planning. Lili has software that takes tax preparedness to another level by actually preparing the tax report, unlike Novo, which only offers cash reserves you can use to fund taxes. Through the Lili tax planning software, transactions can be sorted into tax groups, and a percentage and a percentage can be automatically set aside for taxes. The software further uses your banking data to pre-fill your annual tax forms 1065, 1120-S, and also Schedule C tax forms.
2. Streamline bookkeeping processes. Lili has an expense categorization tool that allows users to group all debit card transactions by simply swiping a finger. Its tax software can create a summary of your business spending quarterly and yearly. Meanwhile, Novo lacks features that enable smooth tax preparation. 
3. Earn interest on balances. Upgrading to Lili Pro, Lili Smart, and Lili Premium will give you access to a savings account that earns 4.15% APY on balances up to $100,000. Meanwhile, Novo checking accounts don’t earn interest.
4. Earn cash back on debit card purchases. The three paid subscriptions, Lili Pro, Lili Smart, and Lili Premium, come with a Visa Business Pro debit card. Users of these plans earn cash-back rewards. But Novo business debit card users don’t earn cash back on purchases.

Lili Checking Account Plans

Lili’s business checking accounts have business banking plans that are paid for monthly, and anyone can apply to become a customer. There are four plans an eligible customer can choose from, and one of them is entirely free but has limited features. The good news is that all four plans have a debit card and fee-free access to MoneyPass network ATMs, including the free plan.

For customers interested in earning interest, the three paid plans are attached to an interest-bearing savings account with a 30-day free trial. As for the free plan, customers only have an emergency savings feature. They also feature a free 30-day trial to try out a business checking account before committing. Lili only offers customers four banking plans and nothing outside of its plan structure.

1. Lili’s Basic plan: is for entrepreneurs seeking to have a free checking account. The plan doesn’t need a minimum deposit or monthly fee to maintain the account. However, the Basic accounts have limited features compared to paid plans. Lili Basic comes with a standard business checking account, a Visa debit card, and an option to receive direct deposit paychecks even two days before. The account has no savings account. Instead, account holders can create automatic daily transfers to Lili’s Emergency Bucket and access it anytime. Unfortunately, the emergency bucket doesn’t earn interest.
2. Lili Pro: is the company’s most affordable plan, which costs $15 per month. The plan comes with an Advanced Business Checking account without minimum deposits. Instead of a basic debit card, Lili Pro account holders get a Visa Business Pro debit card with Cash Back Rewards. 

• Customers also get a savings account that earns 4.15% APY. If the business isn’t looking up or you need some cash quickly, the BalanceUp feature allows customers to overdraft up to $200 fee-free debit card purchases. Customers have to enroll and be approved to access and benefit from this service. 
• Other perks in the pro plan include an automatic tax savings feature and business expense management tools.

3. Lili Smart: costs $35 per month. It comes with the same features as Lili Pro, but Lili Smart customers can access extra business tools like:

• Smart bookkeeping, 
• Financial reports 
• Unlimited invoices and payments, and 
• Pre-filled business tax forms

4. Lili Premium: is the platform’s most expensive plan, costing $55 per month. It has all the features of the Smart plan, a dedicated account specialist, and priority customer service. Finally, customers get the metal version of the Business Pro debit card. 

How to Create a Lili Checking Account

Creating a Lili business account is a simple process. Follow the steps below to become a Lili customer:

1. You must be eligible

To become a Lili customer, you must be 18 years of age, have an SSN, a US-based address, and have phone contact with a main US carrier. You must also own any of the following businesses: 

1. Sole proprietorship 
2. LLC
3. S-Corp
4. General Partnership, or 
5. Limited Liability Partnership. Without any of these business structures, your application will be futile. 

2. Download the app

Download the application on your smartphone from the App Store (for iOS users) or Google Play Store (for Android users), then navigate to the “Lili Bank” icon. 

3. Sign up

Go on to sign up by clicking on the “Sign up” tab and start your registration process. Provide a valid email address and create a secure password. 

4. Provide personal information like the app prompts you

• Name
• Date of birth
• Social Security number. The information is used to verify your identity and also comply with Lili regulations.

5. Provide business information

The App will request information like the industry you’re working in, occupation, and contact information, including your phone number and business address, for easy reach. The app might ask for additional information to verify the information you provided and also comply with bank regulations. Some identification documents they might ask to verify your account include a driver’s license, passport, or state ID. 

6. Wait for approval

The next thing would be to wait for approval from the Lili team, who will review and send a response within minutes or a few hours. However, depending on the applications Lili is receiving, approval might take several working days. 

7. Access your account

After receiving the approval message, the next step is to access your account on the Lili app and learn how to navigate your transactions anywhere, anytime. 

8. Order your Lili debit card

Go on to order your Lili debit card, which you can use to shop and withdraw cash globally. 

Factors to Consider when Choosing a Checking Account

When choosing a checking account between Novo Vs. Lili, consider these factors:

1. Fees: Evaluate monthly charges, maintenance, overdrafts, or any other bank fees to find a favorable choice for your business.
2. Requirements: Find out what the bank demands of you to open a checking account: check if you must have a minimum deposit or maintain a minimum balance.
3. Account access: Check if the bank operates physical branches where you can do some transactions in person or get assistance. Ensure the bank’s website or mobile app is easy to access and user-friendly. 
4. ATM access: Find out if you can access a broad network of fee-free ATMs or get compensation for charges incurred when using out-of-network ATMs. 
5. Interest: Learn if the money in your checking account earns interest and at what rate. 
6. Reputation: Ensure your partner with a bank with an outstanding standing reputation in customer service and financial stability. 
7. Partner with a bank that offers insurance (Federal Deposit Insurance Corporation (FDIC)) over your deposits.

Frequently Asked Questions

What should I know about a checking account?

What you should know about a checking account is that you should be able to pay bills, make deposits, make purchases using a debit card, or write checks. Some checking accounts require a minimum balance to operate or charge a monthly fee for the customer to access the account. 

Do checking accounts allow cash withdrawals?

Checking accounts allow both withdrawals and deposits, and they can be accessed in various ways: checks, ATM withdrawals, and debit cards. Depending on the type of account you open or the bank you decide to work with, some may charge a monthly fee for operations or a minimum deposit for the account. 

How do I deposit money in a checking account?

To deposit money in a checking account, you provide cash, endorse checks, and send a deposit slip to the teller. You can deposit both checks and cash in person at any of your bank’s locations.

Which bank is Lili Bank with?

Lili is a financial technology company that partners with Choice Financial Group to offer online banking services to customers. The Choice Financial Group is a member of the FDIC, meaning your money is safely held by a reputable body. 

How do I get support from Novo Bank?

You can get support from Novo via email or the Novo app, which is similar to its online-only business service. The lack of real-time customer support can be frustrating, especially if a customer has issues with their account and needs immediate action, such as fraudulent charges. 

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In Summary

As you compare Novo Vs. Lili for business checking 2024, Novo is more cost-effective as it offers fee-free service, free invoicing tools, numerous reserve accounts, and access to fast payment. Besides, customers get to save through its zero ATM charges for withdrawals and up to $7 ATM monthly reimbursements. Moreover, Novo customers can apply and quickly access Novo funding to increase their working capital. 

Lili’s, on the other hand, has tiered plans that begin with a free basic account with limited features, while the other three paid plans have more distinct features. If you decide to partner with Lili, choose a plan that suits your business needs. The best features on Lili, like assistance in tax planning, invoicing tools, expense classification, interest accumulating savings accounts, and cash back, are only accessible under the paid subscription plans. 

Ultimately, choosing between Novo Vs. Lili depends on your financial game plan and business objectives. Novo is an ideal choice for small business owners and freelancers working on a budget, especially with its seamless integration of different tools and user-friendly mobile app. 

Lili stands out as a suitable business checking account for established businesses or private contractors. Its automated expense monitoring feature, invoicing, and tax preparedness features make it stand out. Therefore, weigh your options between an affordable, user-friendly mobile app or streamlined cash flow, comprehensive automation, and tax preparedness, and then make a favorable decision.