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Free Business Banking

Novo Banking - ThriftyPal
Who doesn’t want free banking for their business?

Banking is one of the first concerns you look into after registering your organization with your state. We use NOVO! It’s free, they give you $40 just for opening and funding your account, and they do not charge overdraft fees. Plus, you can create allocations for your business expenses to ensure funds are used properly within your budget.

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Let me explain. When banking with Novo, you can go ahead and decide what percentage of your funds you will spend on xyz. For example, let’s say you have a nonprofit. You want all of your donations to be used proportionately, wisely, and in a way that will make the IRS happy. You create a budget that looks like this:

  • 15% of funds allocated to staffing and payroll
  • 25% of funds allocated to corporate expenses and office supplies
  • 20% of funds allocated to charitable events and assisting others
  • 10% of funds allocated to legal expenses
  • 20% of funds allocated to building/location upkeep and maintenance
  • 10% of funds will be saved for a rainy day or dissolution expenses

These numbers are for demonstrative purposes only.

Allotting Funds Automatically

Once you decide how all of your funds will be spent and what percentage of your funds your organization will spend for each expense category, you can set it up right in the Novo app. Just log into Novo, click on the “More” menu tab, select “Reserves”, and create a reserve fund for each category. You will literally add those six categories and set the percentage for each one right in the Novo app. Afterwards, every time your account gets a deposit, each reserve gets the correct percentage.

What Do Reserves or Allocations Look Like?

Therefore, if $100 is deposited into your account, $15 will be set aside for staffing expenses. $25 will be set aside for corporate expenses and office supplies. $20 will go into your charitable events reserve. $10 will be put aside for legal expenses. $20 will be placed in your maintenance fund reserve. Lastly, $10 will be reserved for emergencies or potential dissolution expenses. Of course, we never really plan for a dissolution. Unless you are someone who literally builds businesses just to sell them, you do not go into business planning to go out of it.

You don’t ever have to worry about where your funds are going!

Automate Expense Allocations

Now, all you have to do is wait until you start using your account. When a transaction happens, you can click on that transaction from the Novo app and choose the category it fits in. Every time Novo notices that transaction (or similar ones), it will automatically take it from the right reserve. You don’t ever have to worry about where funds are going! Remember the allocation percentages we used above? If you make a purchase at Office Depot for pens, paper, and ink totaling $20, it will be taken from your office supplies reserve ($25). That would leave a balance of $5 in your office supplies reserve!

Moreover, here’s the best part! If another office supply purchase totaling more than the remaining $5 occurs, it will still go through. However, it will take from your available balance. If your available balance is $0 but you still have reserves, your available balance will go into the negatives until you either assign the transaction to a different reserve, deposit money into your available balance, or move money from your reserves into your available balance.

Free $40 For Your New Account

Therefore, assuming your available balance is $0, if the new purchase is $10, $5 will be removed from your office supply reserve to cover the transaction. The remaining $5 owed will put your available balance in the negatives by $5.


If you later deposit $50 to your account, $5 will cover what you owe, and the other $45 will be allocated to your reserves just as I explained the $100 allocations above.

Business Banking Made Easy!

It Just Makes Sense

We have used Novo for a few years now, and they are constantly making changes that benefit owners. Recently, they stopped charging overdraft fees. As long as you have enough money in your available balance or reserves, it’ll go through. If not, it will just decline. However, it will decline without charge!

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