I know each state is different, but in Maryland we are required to return our tenant's security deposit with accrued interest. Typically this isn't a problem because the percentage is around 1%. However, our small PM company is picking up our 1st client in Prince Georges (PG) County. Their County law requires a 3% return on the security deposit. Does anyone know what type of account I can expect to see 3% returns and still stay within the law? It seems like madness!
Thanks in advance!
You wont find a bank that will give you the interest. It is your responsibility to pay the interest, not the banks. You simply put it into a savings account with no other funds comingled with it.
Hello Joshua. Go to M&T Bank. They have a security deposit escrow account available. Under your master account, the tenants will have "sub-accounts" which will hold their deposits, thus keeping you compliant with the law. Go into a branch and ask the small business advisor for more details. Best of luck to you.
None. Make it clear to your property owner client that he/she is responsible for paying the interest.
Thanks for the feedback everyone, greatly appreciated! @Laticia Braxton I believe I just heard your name mentioned the other day. I was talking to a gentleman named Tim who does snow removal up around Aberdeen and he said he used to do a lot of work with you. Small world!
You're more than welcome and yes! Tim is a great guy and was my saving grace during any snow/ice event at a shopping center I managed in my past career! Super dependable and friendly guy. It truly is a small world :-)