What banks are best for depositing security deposit - MASS

Cape Cod, Massachusetts
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What banks are best for depositing security deposit - MASS

Mike Maloney
Member since 2024 · 15 posts · 6 votes

I am looking for a bank that holds tenants security deposits and automatically pays the interest directly to the tenant annually, see the rest for description.

Hello, I am a first time property owner and am trying to figure out where it is best to deposit security deposits, I am aware that it must be deposited in an interest bearing account per MASS law but also the tenant needs to receive the interest annually and I do not want to have to manually perform this task. A high yield or higher than average interest rate would be ideal but that is my main concern.

Thanks

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  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    2y

    You must deposit to a trust account at a Mass bank. You will need to have your banker set up a business checking account under your name, next line should say MASS. SECURITY DEPOSIT TRUST ACCOUNT
    In the bank's system the banker needs to set you as Trustee.

    Within 30 days of depositing the security deposit, the landlord must give the tenant in writing:

    • The name and location of the bank where the deposit is
    • The amount of the deposit
    • The account number
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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y
    Quote from @Mike Maloney:

    I am looking for a bank that holds tenants security deposits and automatically pays the interest directly to the tenant annually, see the rest for description.

    Hello, I am a first time property owner and am trying to figure out where it is best to deposit security deposits, I am aware that it must be deposited in an interest bearing account per MASS law but also the tenant needs to receive the interest annually and I do not want to have to manually perform this task. A high yield or higher than average interest rate would be ideal but that is my main concern.

    Thanks


     you will not find a bank that does that. YOU will need to send the money to the individual and do this manually. No way around it. 

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  • Mike Maloney
    OP
    Member since 2024 · 15 posts · 6 votes
    2y
    Quote from @Chris Seveney:
    Quote from @Mike Maloney:

    I am looking for a bank that holds tenants security deposits and automatically pays the interest directly to the tenant annually, see the rest for description.

    Hello, I am a first time property owner and am trying to figure out where it is best to deposit security deposits, I am aware that it must be deposited in an interest bearing account per MASS law but also the tenant needs to receive the interest annually and I do not want to have to manually perform this task. A high yield or higher than average interest rate would be ideal but that is my main concern.

    Thanks


     you will not find a bank that does that. YOU will need to send the money to the individual and do this manually. No way around it. 

    My mom was a property manager for 20 years and she said Sovereign bank used to do it but they are no longer around.
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  • Mike Maloney
    OP
    Member since 2024 · 15 posts · 6 votes
    2y
    Quote from @Melanie P.:

    You must deposit to a trust account at a Mass bank. You will need to have your banker set up a business checking account under your name, next line should say MASS. SECURITY DEPOSIT TRUST ACCOUNT
    In the bank's system the banker needs to set you as Trustee.

    Within 30 days of depositing the security deposit, the landlord must give the tenant in writing:

    • The name and location of the bank where the deposit is
    • The amount of the deposit
    • The account number
    Thanks for sharing your knowledge, what I'm really looking for is what specific banks do this and if any of them automatically pay the interest annually, I was already familiar with the laws, thanks!
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