When was the last time you physically went to the bank to make a deposit? With all the new technological advances, making deposits or receiving money from a third party has become a breeze. Online banking has made substantial improvements, and now ACH/Direct Deposit payments are becoming the new norm. Read on to find out the benefits of setting your rental payments on direct deposit.
In the last five years with Management One, we only had about 10% of our owners on ACH or mail directly to the bank. During this time I processed thousands of deposits, stamped thousands of cashier’s checks and money orders, signed just as many checks to owners, and let’s not even mention stuffing hundreds of envelopes every month. The cost of postage was through the roof. Costs that, unfortunately, were passed along to our customers.
Fast forward to today, where 80% of our owners are on ACH, and they love it. No more waiting by the mailbox every day to see if the rent check has arrived so you can pay your mortgage. Or having to go to the bank to deposit said check. Everything is done automatically, saving you and me time and money.
Why do I need to have Direct Deposit for my rental payments?
Does your rental payment ever get lost in the mail? A lot of investment property owners who are not on Direct Deposit for their rental payment have this problem. Waiting for a check in the mail is inefficient in getting you what you need. Having Rental Payments on Direct Deposit allows you access to the funds within 24 business hours of them being processed.
Here’s 7 ways direct deposit rental payments can benefit you:
1. Lower Costs
Eliminate spending time and money on trips to the bank to deposit your check. Did you know that banks also charge extra for visiting their branches and using their tellers? For Bank of America users, you can avoid a $12.00 per month fee on your core checking account just by having a monthly direct deposit transfer set for your account.
ACH/Direct Deposit transfers offer the lowest transaction fees in the banking world, followed by paper checks, then credit and debit cards. On top of the revenue for rent increases received from rental properties, ACH/Direct Deposit transactions save you money.
According to the 2016 AFP Payments Fraud and Control Survey, paper checks were the payment method most subjected to fraud in 2014. And it's no surprise; checks get lost in the mail, people steal your identity, they are susceptible to tampering and subject to error. ACH/Direct Deposit payments are much safer, faster, and reduce the risk of fraud or tampering by directly transferring funds from our bank to yours.
It's done in a flash! Funds are sent electronically to your bank, and you can make use of those funds in 24 business hours. It eliminates all the hassle of waiting for the check, driving to the bank, waiting in line at the teller, then waiting some more for the check to clear. Forget about the waiting time, with ACH/Direct Deposit you can make use of the funds faster. No need to do anything, just spend!
4. Reduce human error and increase time savings
No more trips to the bank and less time staff spend processing payments, means they are more readily available to take your call and answer any questions you might have. With ACH/Direct Deposit you eliminate the chance for human mistakes to occur by sticking two checks in an envelope, checks mailed backward or mailed to the wrong person. We all make mistakes sometimes but since the rental payment is directly deposited it has fewer hands handling the funds = fewer errors.
5. Faster processing time
Unlike a paper check, ACH payments are given preferred funding over paper checks, meaning that banks will usually process an ACH/Direct Deposit payment before a paper check. Owners who have set up their rental payment direct deposit have access to funds in 24 business hours. But if you're still in the snail mail program, sometimes you won't be able to access the funds until the 12-15th of the month vs. the 1st- 5th of the month.
6. Immediate confirmation:
As soon as payment is issued, you receive an email to let you know funds are processing and you should receive them within 24 business hours. No more playing the waiting game, calling the office and waiting for a call back from the accounting department on whether or not funds have been processed. No more guessing! You know exactly when to expect those funds.
7. Paper check transactions are shrinking!
According to the 2013 Federal Reserve Payments Study, the use of checks declined nearly 40 billion transactions in 2003 to less than 20 billion in 2012, whereas the number of ACH transactions grew at an annual rate of 5.1% from 2009 to 2012. Therefore, based on current trends we will be getting rid of paper checks in the near future, don't wait just join the movement.
Looking for a property management company that is on “inside” track of technology, then look no further. Here at Management One, we believe in streamlining property management in an effort to provide you the best customer service we can.