Maryland Security Deposit Trust Accounts

[Chin P.]

Question for those landlords operating in Maryland. I understand that the Maryland Security Deposit Law requires landlords who collect security deposits to deposit the funds collected, within 30 days of receipt, into an interest-bearing escrow account that is used exclusively for security deposits. Which companies do you use to hold your security deposits? Also, I understand that you're required to pay 3% interest on the security deposit. I assume you're making this up out of your own pocket because no bank account I could put a security deposit in pays 3% now a days, right?

[Tony Christian]

I'm not from Maryland, but I found that 3% rate hard to swallow. 

I looked up Maryland's statutes and found this in section 8-203 e (1) (i)

Within 45 days after the end of the tenancy, the landlord shall return the security deposit to the tenant together with simple interest which has accrued at the daily U.S. Treasury yield curve rate for 1 year, as of the first business day of each year, or 1.5%, whichever is greater, less any damages rightfully withheld.

(ii) For any year in which the landlord has held the security deposit for less than the full year, the landlord shall pay an amount of interest calculated by:

1. Multiplying the amount of the deposit by the daily U.S. Treasury yield curve rate for 1 year that was in effect as of the first business day of that calendar year, or 1.5%, whichever is greater; and

2. Multiplying the result obtained under item 1 of this subparagraph by a fraction, the numerator of which is the number of months that the deposit was held that year and the denominator of which is 12.

So basically (correct me if I'm wrong) it looks like your interest rate is tied to the U.S Treasury yield curve rate or 1.5% (whichever is greater)