Spent 6 months using the wrong bank account for my business, cost me $1,200 in fees

I opened a personal checking account when I started my LLC last year because it was quick and easy. After 6 months, I realized I was paying $15 a month in fees and getting hit with transaction limits that didn't apply to business accounts. I finally switched to a proper business account at a credit union in Austin and saved $1,200 total in fees and penalties. The process only took one afternoon once I actually sat down to compare options. Has anyone else made this mistake with their banking setup?

2 comments

2 Comments

leo61221d ago

Wow, gotta disagree hard with this take. $1,200 over 6 months is only $200 a month, which is chump change if you're actually running a legit business. Personal accounts have no special perks but business accounts hit you with minimum balance requirements and monthly fees of their own, so you might just break even or even lose more depending on what your credit union charges. Why complicate things when a simple personal account worked fine for half a year until you noticed the fees?

valw3620d ago

My own bookkeeping is such a mess that I once spent 20 minutes looking for a receipt that turned out to be a grocery list for a birthday cake I never even baked. So trust me, I get that $200 a month sounds small, but when your "business account" is actually just your checking account with a couple extra zeros and a mortgage payment riding on it those little fees start to add up fast. I'd probably lose the $1,200 just in overdraft fees from forgetting to move money between accounts, so maybe I'm not the best person to give financial advice here. Personal accounts work fine until you accidentally file a 1099 for your dog's grooming business and the IRS shows up asking questions.