Security deposit in a high yield account

[Brian Warren]

I understand that I need to hold the tenants security deposit in a separate account... I was thinking of putting into a high yield savings account 1.9% or possibly putting into a 12 month certificate of deposit at about a 2.1% yield, Has anyone ever done this? Does anyone have a strategy that they feel strongly about? Or is this just not worth the hassle? My line of thinking is that they will be signing a 1 year lease and I will be holding the deposit for 1 year anyhow I may as well get a little interest on it.

Concerns are if they break the lease early..

but most cases I think of that is the case they will be forfeiting the deposit anyway..

Open to thoughts or opinions please

[Carolyn Fuller]

You should check the laws in your state. Some states (e.g., Massachusetts) require that all interest goes to the tenant.