What to do with security deposits in Indiana

[Robert A Lawson]

I have been a property manager (and my wife a realtor) for many years on a smaller scale; helping out relatives and friends. But recently my company has exploded in the Hamilton County, IN area. I knew never to touch any security deposits, don't view it as any income, must be put in trust, etc. And I haven't done anything but keep the deposits in a business savings account. But now that there is tens of thousands in the account, Is there anything I can do with it to have it grow more than 0.01% in a savings account?

I looked over the real estate laws in Indiana, which haven't changed much since the 70's, but not much is said about what you can do with deposits. Just that they are to be securely held and returned. Does anybody else in Indiana know of a safe account I can move deposits to gain more interest?

I would guess that larger management companies have money managers that put a certain percentage into other investments.

[Josh C.]

We are a small-medium sized pm firm with a lot of security deposits. We were instructed to make certain it doesn't earn interest. You definitely don't want a money manager to touch it and lose it. It's not yours to play with. Also, not sure you are correct about keeping it in a trust. Talk with your attorney, but I believe it must be in separate bank account earning 0%. Being an agent is a requirement of starting a PM company, but so are tons of other things, and you want to make sure you dot your i's and cross your t's. Getting sued, even when you win, is no fun.

Nice job on your success and growth.