Since Covid, I no longer need to go to my wells fargo bank and I'm looking at setting up my rental accounts with an on-line bank like Ally, that pays higher interest rates. Right now, I collect rents with ClearNow, and the rents get deposited into the single wells fargo account, I use for both collecting rents and paying expenses.

Please tell me, do you have separate accounts, like a interest bearing savings account for depositing rents and a checking account for paying contractors, etc? Do you think I should have separate accounts for each of my 4 large student rentals? Is there a particular bank you like? Do you use their credit or debit card to pay for rental property expenses?

Any thoughts you can share with me on this are appreciated. Thanks!!

I live in an area with spread out towns (Northern Michigan). No bank here has branches in all the places my rentals are located. So I have accounts at several different places where it is convenient for the tenants as many tenants are marginal or don't have bank accounts (one of the many problems with C level tenants).Using clear now is not an option for some of them. They take their money and deposit at the place that is most convenient to them.

Anyway, from these several places (banks or credit unions), I just move the money electronically to my operating account and all bills are paid from there. I have 2 accounts at each place--one for the tenants to deposit the rent and a second to hold the growing balances. This keeps the amount in the account that the tenant knows about low, like $100, so if they get the idea to try anything there is almost nothing in the account for them to get at. The rest is held for reserves or invested. My main operating account (in a separate bank) is used to pay all expenses for all the rentals.I pay these expenses twice a month and only move enough money into the operating account to cover that months expenses. The money goes into the operating account and bills are paid in the next couple days. The balance in the operating account is kept low as well.

Because of the current things going on in the country and the possibility of problems in the banking system, I think it's a good idea to spread out the money into several different credit unions and banks so that if one or two shut down or mess with/freeze my account I still can go to a different place and get money (hopefully). I also think it's a good idea to have "cash on hand" in several different places, be it physical cash, silver, gold, or whatever that can be accessed if necessary. Just like having extra supplies of food in several locations or a spare place to go to in an emergency (ask the people in Kentucky who got flooded recently or the people in Calif who got burned out in those brush fires).

If you were getting, like, 5% interest on your savings account, that would be one thing, but with rates so miserably low, it doesn't give me the motivation to set aside funds for the purpose of gathering interest.

I like having my brick-and-mortar banks, because if I have a problem, I can show up in person and say, "Excuse me, I have a problem." If I have a really big problem, and I want to withdraw $x, or close my account--- I can do that in person as well. Very old-school, but I'm okay being old-school. :)

I have five biz checking accounts at the moment. They originally started that way when I had my tenants depositing their funds into whichever LLC owned their particular house.

Now that I use ClearNow, most of my funds get deposited into one main operating account to fund renovations and major expenditures. I do have a few legacy tenants who still deposit into the others. One, I use for funds for the handyguy, or for yard care, or unexpected HVAC repairs, or things like that. Another, I let accumulate for property taxes.

Richard, I don’t have tenants that pay at my bank, it’s all through ClearNow, so that’s not an issue. I’ll just have to learn to use an ATM to get cash :-)

You point is well taken about diversifying your savings. I hadn’t thought about that before, but it makes good sense in this day and age. Thanks! And that’s what I do too, auto pay my buis credit card out of my buis account.

Deanna, it is low, but Ally bank, for example, pays 1.6% on savings, so if I average 30k in the account, that’s $480 per year, and some dinners out. But yeah not a lot.

Interesting on the lowes amex. I didn’t know about that. One thing I like about HD, and I haven’t been able to do at Lowes, is a nice on-line record of all purchases in the store with credit card and on line. At purchase with business credit card, HD always prompts for additional information during a purchase, and I enter the property and classify the expense, per IRS guidelines.

Yes, banks are "backstopped" by FDIC insurance up to $250,000 per person per bank. If you have more than $250k in one or more accounts in same bank, may want to move some to another bank to lower your risk. Investment accounts have greater coverage through SIPIC.

I don't keep anything in a savings account.

I have checking accounts at 90% of local banks. When someone makes deposit I zelle it into my main account

I have 1 main checking account that pays 4% an I keep about 10k in it is my comfy spot

Everything else goes towards my line of credits.. pay it down, buy another house, rinse an repeat

Credit card is Alliant 2.5% back an I use for everything

Go where ever get best bang for your buck

An fine your happy spot... for me under 8k in checking I get nervous... over 12k feels like losing money