Setting up an escrow account for security deposit in GA

[Kazi R.]

I need to open an escrow account to keep my tenants' security deposit. So far I have stopped by 2 different banks to inquire about escrow account, both of which told me that I could just set up a checking account for this purpose and call it an escrow account. What they weren't able to answer is this: can I open up an interest bearing savings account and call it an escrow account? Ideally I would like open an online savings account such as Barclays or Ally online saving account for this purpose.  I appreciate your input on this.

Georgia's law regarding security deposit is following:

What is the landlord required to do with the security deposit?

Under Georgia law, a landlord who owns more than ten (10) rental units, including units owned by their spouse and/or children, or who employs a management agent is required to place the security deposit in a bank escrow account, used only for security deposit funds. The landlord must give the tenant written notice of the location where the security deposit is held but is not required to disclose the account number. As a substitute for having an escrow account, the landlord may post a bond with the superior court clerk of the county in which the rental property is located. 

[Account Closed]

Don't believe the people at those 2 banks. They don't know what they are talking about. I had this exact same problem when I tried to open a security deposit account. The bank told me the same thing. I tried to explain to them that I can't just open a regular checking account and call it an escrow account. It needs to be a special kind of account that is protected in case I get sued, because it is not my money. It belongs to the tenants. They didn't get it. So, I moved on. Finally found someone at Citibank that knew exactly what I was talking about, set up the accounts I needed, and it has worked out great.

In California, we are not required to make accounts interest bearing, so I don't have one. I can't answer your question about that.

Be diligent and make sure they understand what you want. They may call it a trust account, escrow account, or security deposit account.