Any risk giving bank account number?

Question

In order to make payment easier, I am considering giving the bank account number so that deposits can be made directly. Is there any RISK in giving them the account number? Do you use a separate account just for deposits and then transfer them into your main account? Thanks!

Account Closed · Answer

I sign up for all possible alerts on my personal accounts (deposits, withdrawals, logins, password changes).

I recently got an alert saying someone tried to log into my account.  It wasn't me, so I immediately called the bank.  No money was missing.  After an investigation, the bank concluded someone with a similar user ID as mine entered my user ID by mistake.  When the password didn't match, I got the alert.  I changed my user ID.

Connie Chan · Answer

@Sheena Lee Don't do it! There is indeed risk. I use a separate account for each rental property, but there's STILL risk for giving tenants your account number. For example, it makes it really hard to evict a tenant if you give them your bank account (at least that is true for the area where my rentals are, it is location specific). The tenant can always send a partial payment and I can't block or refuse to accept it. Now your tenants might be "good" tenants but I don't think it's worth the risk. Also, bank statements aren't great for bookkeeping. It's better to have a separate system. For example, I once was checking my statements and noticed that it seemed off by the amount of the security deposit, but my bank doesn't even show me my checks written or cashed beyond 18 months. I went to the local branch and the manager couldn't get the images either. There are other safer ways of collecting rent that still allow for deposits to show up directly into your account. I choose to use an app called Tellus since its free and mobile and my tenants prefer a mobile system where they also get the notifications. It gives me a notification when the rent is paid or late. More importantly, unlike the bank account, I can choose to block payments altogether or block partial payment. From a business perspective, I think it's safer to have these systems in place, just in case.

Brandon Sturgill · Answer

@Sheena Lee My tenants do payroll deduction or deposit at a kiosk...I've never had a problem with issuing the account numbers...

My bank card just got cancelled because my Amazon Prime membership renewed and the bank didn't recognize it. Bank security is pretty f'ing high.

Jay C. · Answer

Hi, This exactly is my preferred method. I opened a savings account for this purpose only. Renter pays this account at the bank. I can see when payments are made. I can then transfer payments easily into my main account. It as well serves like a payment office. Rent is due and when the bank closes on the last day @ 5pm "boom" rents are then late and late fees apply. I use a bank that has branches every where including very close to my rentals. Its added benefit is the record keeping portion is always at my fingertips.  I supply my tenant's with a business card sized laminated card with the account number on it. On one side is the account for rent and the other side I have all the utility/emergency contacts ect. Been working flawless for a decade.

Ty Kirkpatrick · Answer

I'm not a fan of giving out personal information.  I am a huge advocate for investors utilizing third party agencies or services.  Third parties that offer incentives like reporting pay history to the tenants credit report.  I am not trying to advertise.  It just gives you security and your tenant benefits for on time payments

Joe Splitrock · Answer

@Sheena Lee bank checking accounts are incredibly insecure. There was a local business in my city that had over $100,000 stolen by someone who hijacked their account number and wrote fake checks. Giving out your account number increases risk, but every time you write a check, your account number is given out so there is no way to keep it confidential. Someone could go to any office supply store and buy laser printer check blanks, then print checks with your account number on it. They could issue checks and the bank would cash them.

As others suggested, you can give out your savings account number. You generally can't withdraw from a savings account without producing photo ID, so that is safer.

Every investor should check all their checking and savings accounts daily for transactions. Money can be pulled back if someone stole your account number only if the receiving account is still open with money in it. Scammers open accounts, deposit fraudulent written checks, then transfer money overseas and close the account. Your bank may not reimburse the money. The longer you wait to report it, the lower your odds of getting the money.

This is why I never use checks or debit cards, unless it is the only option. Everything goes on a credit card, because you are 100% protected on the transaction. We also transfer money out of our checking account, so there is never large sums of money in the account. That limits potential fraud.

Pat L. · Answer

We do the same. But once on an escrow account for a note we held, they deposited then somehow convinced the assistant Bank Manager to allow them to withdraw it all. They were NOT on the account, did not have any ID regarding the account & it was an EIN #'d corporate account.

That was the same week they walked away from the property. To avoid losing their credit rating they signed the property back deed-in-lieu-of. We sold it for $15k more & the bank eventually reimbursed us for all monies withdrawn. We have a LOT of escrow accounts & that was the first.

I assume the bank pursued them for the cash.

Johann Jells · Answer

I have read here that there's a risk during an eviction conflict that the tenant can make a payment you would not accept normally. But that certainly is an edge case. However, why not just use Cozy?

Anthony Hurlburt · Answer

Your bank account number is on every check you've ever written, so there should be no issue if you give it to your tenants.

Any risk giving bank account number?

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