How Should You Store the Security Deposits?

Depending on where your rental is, you may also have to pay interest on the security deposit or place it in a separate bank account insured by the FDIC (Federal Deposit Insurance Corporation). Each state (and sometimes cities) have different requirements. For example, certain cities in California require the landlord to place the security deposit in an interest-bearing account and pay the interest to the tenant. Be sure to check with your local ordinances to make sure you are compliant.