I live in Kentucky, USA. I rent out a house in Alabama, USA. My tenant wants to pay rent using electronic funds transfer rather than by mailing a check. This makes it easier for him to get my payment on time and it also comforts his fear of the check getting lost in the mail.
My understanding is that I must supply him with a routing and account number in order for him to electronically transfer the funds from his bank to mine. I am cautious about this but I couldn't find anything that explained why this might be dangerous to me. I even called my bank to find out if there is a more secure means of transferring funds and they advised me that someone would be able to make withdrawals from my account as well as deposits. That did not help ease my concern.
My plan is as follows:
- Send my tenant the routing and account number for the checking account that I use solely for automatic withdrawals to a financial planner, some utilities, etc. It has, on average, about $300 in it.
- Monitor the account as closely as I do all my finances - I keep track of everything to the penny - and watch for any abnormalities.
- As a backup, rely on my bank as they stated that any abnormal withdrawals from an account will get flagged and held until they can confirm with me.
My question is, in general, is this a safe plan? In particular, I have these thoughts:
- How can someone use the account number to withdraw money without my consent? (I'm satisfied with the reassurance that my plan is safe but this is the question I still can't figure out.)
- I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts?
- Is there a more secure and still free option that I have overlooked?