Paying the Yearly Interest fee on Security Deposit.

4 Replies

Deposits are refundable. Fees are not refundable.

Some people are charging something similar to a security bond. Tenant pays a small amount, maybe 1/5 of a standard deposit, that is non-refundable. You still go after them for unpaid rent, cleaning, and repairs. It's a higher risk for you and I personally wouldn't recommend it but it's something you could look into.

I would look into Rhino. It’s a deposit insurance plan in lieu of a deposit and only costs a small monthly fee. It’s much easier to get higher amounts with this for lower Qualified applicants. 

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@Andre House does your city/state require you to pay interest? My city does, butvallows a reasonable withholding of administrative fees (I forget exactly how it’s written). Considering I’m making 0.5% on the security deposit, the $4 owed each year isn’t anything after some very reasonable fees.

Thank you everyone for your feedback.  As I read more into paying interest on security deposits in the state of Illinois. They require 25 or more apartments, the landlord must pay interest on the security deposit. 

The landlord is required to pay interest if they have held the security deposit for 6 or more months. If the tenant stays in the apartment 12 or more months after they signed their first lease, the landlord can choose between paying the interest on the security deposit or reducing the rent for one month by the amount of interest owed. After the tenant moves out, the landlord must pay them all the interest owed within 30 days.