In case you're wondering what the difference is between SFTP and FTPS: SFTP is FTP over SSH and FTPS is FTP with SSL.
Step 1 – Setup chroot in SSH config
sudo nano /etc/ssh/ssh_config
Paste the following in this file
Match group sftp ChrootDirectory %h X11Forwarding no AllowTcpForwarding no ForceCommand internal-sftp
This will ensure that each user belonging to the sftp group is chrooted to their home directory
Step 2 – restart the SSH server
sudo service ssh restart
Step 3 – Create the sftp group
sudo addgroup sftp
Step 4 – Create SFTP user
sudo adduser --home /home/USERNAME/ --no-create-home --shell /usr/sbin/nologin USERNAME
Replace USERNAME with the username you want to use to login with SFTP. Setting the shell nologin ensures that this user will not be able to login with SSH
Step 5 – Add the user to the sftp group
sudo adduser USERNAME sftp
Step 6 – Set the ownership and permissions
Change the owner of this directory to root
sudo chown root:sftp .
Set the permissions of this directory to 755
sudo chmod 755 .
Step 7 – Create dir within home dir
A directory within the home directory needs to be created
The USERNAME needs to be set as the owner of this directory
sudo chown USERNAME:sftp /home/USERNAME/somedir
You are now good to go and are able to read and write files to /home/USERNAME/somedir. You will not be able to r/w files to /home/USERNAME as this directory is owned by root:sftp and SFTP will fail if this is not the case. All credit to Baxeico for this information.