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"Direct" Deposit
Old 03-21-2006, 10:53 AM   #1
 
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"Direct" Deposit

The new owner of my business will be sending me a check each month. To speed things up, I was thinking I'd just send him a bunch of deposit slips for my money market account, and have him send the money right to the mutual fund company.

Any reason not to do it that way?
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Re: "Direct" Deposit
Old 03-21-2006, 10:58 AM   #2
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Re: "Direct" Deposit

Quote:
Originally Posted by TromboneAl
The new owner of my business will be sending me a check each month. To speed things up, I was thinking I'd just send him a bunch of deposit slips for my money market account, and have him send the money right to the mutual fund company.
Just one more person with your name and account number.

Did you ask him if his bank can set up an automatic monthly electronic transfer to your MMF? Maybe you can set it up on his behalf other than signing the authorization. Just a thought.
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Re: "Direct" Deposit
Old 03-21-2006, 11:04 AM   #3
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Re: "Direct" Deposit

Iíve had a similar situation for a consulting business and electronic direct deposit has been great. I prefer it to paper deposits.


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Re: "Direct" Deposit
Old 03-21-2006, 01:00 PM   #4
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Re: "Direct" Deposit

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Originally Posted by Rich_in_Tampa
Did you ask him if his bank can set up an automatic monthly electronic transfer to your MMF?
That's absolutely the best way to do it. Our tenants paid their rent that way.

Painless, you're not worrying about their memory, and they fear the bank's EFT penalties a lot more than they care about you...
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Re: "Direct" Deposit
Old 03-21-2006, 01:37 PM   #5
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Re: "Direct" Deposit

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That's absolutely the best way to do it. Our tenants paid their rent that way.
Did that cost you any extra? I am buying a rental house and was wondering if I could do that without being charged fees.

thanks,
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Re: "Direct" Deposit
Old 03-21-2006, 02:24 PM   #6
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Re: "Direct" Deposit

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Originally Posted by nnkrealtor
Did that cost you any extra? I am buying a rental house and was wondering if I could do that without being charged fees.
Didn't cost us anything to receive the payment, although I don't know if it cost the tenants anything to send it.

They were "busy" once and missed a payment. This was the corrective action.
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Re: "Direct" Deposit
Old 03-21-2006, 02:42 PM   #7
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Re: "Direct" Deposit

As long as the new owner of your business isn't from Nigeria and didn't find your business listing on craigslist.
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Re: "Direct" Deposit
Old 03-21-2006, 04:49 PM   #8
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Re: "Direct" Deposit

I can't think of how that could be problematic, but it registers real low on the feelgood scale.

I'd rather set up a payment through the bank...it should be doable. Don't know if this helps, but I got confused about "direct" "wire" and "automated clearning house" transfers and read up on them at wikipedia. ACH takes a day or two but is cheap and reliable and should be arrangeable between the banks or via online banking. Wire/EFT costs more (several bucks..maybe even double-digit bucks) and is more or less immediate. Looking at my bank statements, my "direct deposit" paycheck and all automatic payments are ACH transfers.
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Re: "Direct" Deposit
Old 03-21-2006, 05:11 PM   #9
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Re: "Direct" Deposit

Just to be extra careful, what I did in the past was have my renter deposit the rent into my savings account at Wells Fargo, which is normally empty. Then I transfer the money into my checking account and I get the money without having to give out the number of any account with money in it.

I have also used that strategy when I sold a car over the internet to a guy across the country... he wired the money into my otherwise empty savings account and I swept it out of the account as soon as I could.


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Re: "Direct" Deposit
Old 03-22-2006, 12:30 AM   #10
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Re: "Direct" Deposit

I had one landlord that had me pay all rent through paypal. All I needed was his Yahoo email address. It worked great. And cost neither of us anything. And there was an electronic record of payment and email notification.

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Re: "Direct" Deposit
Old 03-22-2006, 07:40 AM   #11
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Re: "Direct" Deposit

Quote:
Originally Posted by kramer
I had one landlord that had me pay all rent through paypal. All I needed was his Yahoo email address. It worked great. And cost neither of us anything. And there was an electronic record of payment and email notification.
Well, the payee does pay a small fee to paypal, I believe. No big deal and well worth it but he/she needs to be willing to take that small hit in return for the convenience. Or, raise the rent by a percent or two.
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Re: "Direct" Deposit
Old 03-22-2006, 10:23 AM   #12
 
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Re: "Direct" Deposit

The amounts of the check will be different each month, so the EFT option won't work.* Vanguard says that I'd have to get his bank info, and initiate the transfer each month.

Paypal charges the money recipient about 2.9%, so that's not an option for me.

Thanks for the thoughts, guys.
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Re: "Direct" Deposit
Old 03-22-2006, 11:20 AM   #13
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Re: "Direct" Deposit

Quote:
Originally Posted by TromboneAl
The amounts of the check will be different each month, so the EFT option won't work.* Vanguard says that I'd have to get his bank info, and initiate the transfer each month.
Sounds like more of that great Vanguard customer service.

The guy who's trying to pay you should be able to have his bank (or his credit union, or just about any financial institution) initiate an electronc transfer (I think I mean an ACH transaction) of the funds every month. It's just like paying a bill, but with electrons instead of a paper check.

You'd have to supply him with the account number and the routing transaction number of the financial institution where you wanted the money to land. That could be Vanguard or any other financial institution whose data you feel comfortable giving to the guy.

Then you don't have to listen to "the check is in the mail". You just wait a business day after the transaction for your financial institution's website to update, then call up your payer and politely inquire as to where the @#%$ your money is.
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Re: "Direct" Deposit
Old 03-22-2006, 11:54 PM   #14
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Re: "Direct" Deposit

I think paypal only charges if you have upgraded your account with a credit or debit card or you are a business (and thus can accept credit cards, etc). For individuals with regular accounts, I do not believe there is a charge.

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Re: "Direct" Deposit
Old 03-23-2006, 05:55 AM   #15
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Re: "Direct" Deposit

I learned something new... paypal has two kinds of accounts:* personal accounts can't receive credit card payments but have no fees.* *Premier accounts (which most people use) can receive credit card payments, but charge about 3% on all monies received.

They don't charge anything to the sender as far as I can tell.

The hitch is that personal accounts can only receive $500 per month so wouldn't work unless the rent is low in this case. And apparently ebay doesn't allow people to use personal accounts to sell items.

Here's a forum thread with the details:

http://www.vendio.com/mesg/read.html...&thread=634040
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Re: "Direct" Deposit
Old 03-23-2006, 10:44 AM   #16
 
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Re: "Direct" Deposit

Thanks for that info, Nords. I called Vanguard back and discussed it more.

It's true that anyone can initiate an ACH-type funds transfer, and that I could put in the routing and account number for my VG money market account. But VG tells me that since they are not a bank, that transfer would be rejected.

I could however, set up a "direct deposit source" [sic] and use that routing number, or open up a Vanguard Advantage account, which is like a checking account, and have the money go there.

Just getting a check in the mail is starting to sound simpler at this point. Mailing slips of paper back and forth is so twentieth century, but whatever.
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Re: "Direct" Deposit
Old 03-23-2006, 11:27 AM   #17
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Re: "Direct" Deposit

Quote:
Originally Posted by TromboneAl
Thanks for that info, Nords.* I called Vanguard back and discussed it more.*
I'm glad you asked the question... I know Vanguard doesn't have to offer these services, but it's become a big convenience with Fidelity to be able to pay bills & move money around.

If I'd been contemplating a move to Vanguard I'd have had to figure out another way to handle billpaying (perhaps with my credit union, but perhaps not for free), and although VG's expense ratios might be better, the hassle factor would have been pretty high. The investments I hold at Fidelity wouldn't be any cheaper at VG, either, so now I know there's no incentive to change.
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