Holding Security Deposits in Baltimore MD

[Beau Ordemann]

Hi BP!  

We are doing our first rental in Baltimore City where we will be managing directly.   We've received the security deposit from our tenant and are trying to determine where to put it.  

I've read on marylandattourneygeneral.gov that the landlord must put the security deposit in an escrow account.  When returning security deposits of $50 or more, the interest rate is payable at 1.5% a year or the simple interest rate accrued at the daily US Treasury Yield curve rate for one year, as of the first business day of each year, whichever is greater.  

With savings accounts at well below 1% interest, I'm curious if there are recommendations for a bank that satisfies this requirement?  Or if the security deposit can actually just be held in a normal separate bank account with no or negligible interest?

Thanks all!

[Alan C.]

Here is the link for calculating security deposits

https://dhcd.maryland.gov/Page...

Note: The interest rate is "greater of the daily U.S. Treasury yield curve rate (“Constant Maturity Treasury”) for one year, as of the first business day of each year, or 1.5%." RIght now, that means 1.5%

The calculator on the website link above will figure out what you owe based on the lease start and end dates.

By the way, if you have a 1-year lease and the tenant is moving out in 6 months, you may have a case for not returning the security deposit due to a breach of lease. But you should check with an attorney to see if this is true.