My Banking Info on Lease for Direct Deposit?

Question

My question is whether it is a good idea to give my Tenants my Business Banking Information (Name, Account # & Routing #) so that they can make Direct Deposits and Online Payments directly into my Bank Account. I find this more convenient than collecting checks, but not everyone is ready to use a purely 100% online system yet. (The concern is potential Identity Theft – am I exposing myself to this possibility?)

Any other helpful solutions for Rent Payments? Thank you so much for any direction!

Any other helpful solutions for Rent Payments? Thank you so much for any direction!

Account Closed · Answer

Hi @Cedric Van Duyn

I have done both. I've provided deposit slips like- @Sarah Williams And if they are online banking savvy, I give them my routing/account info for direct deposit.

To minimize fraud exposure, in general, I keep very little money in my "Operating Account." In my 10 years, it has never been an issue.

Gavin Shiraishi · Answer

I would advice to just open another bank account just dedicated to collecting rent from your tenant.  Get a checking account with no minimum balance necessary.  Just use this account as a sweep account.  The tenant deposits to this account.  As soon as the check clears, move the funds from this account and deposit to your main checking account.  This way if anything happens to this account, there is no money for them to touch in case the account number falls into the wrong hands.

Matt H. · Answer

Yes, anytime you write a check your account number is right on there. And banks these days will refund on any unauthorized withdrawals. You dont have anything to worry about.

Randall Brown · Answer

Good idea with giving them name and date of birth in order to allow deposits.

However, if they deposit a check into your "secret" account, and their bank allows them to see the image of the cleared check, the back of the check usually shows routing number and account number where it was deposited. They would know your account number easily.

2nd, I quoted the part about the physical address vs PO Box. In some states that may be thin ice to walk on. You may need to give them an address where papers can be served. You could use your attorney's address or an office address for that purpose.

There is also something about giving them choices how to deliver rent and who is responsible if the rent is "lost in the mail" (you give them the bank deposit option, so you are probably fine in this regard).

E.g. if you only provide a PO Box and no other means to pay rent, then a judge may hold this against you.

Sarah W. · Answer

Cedric for the past 8yrs, I have used the same method. I gave my tenants deposit slips which only has routing and account number on them. My bank does not provide the tenants any personal information or my account information. I have given permission for online transactions. Hope this helps.

My Banking Info on Lease for Direct Deposit?

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