@Ronnie Sparrow Good question! Thanks for throwing out the question because it made me crack my Landlord's law Book and make sure I was still within the law. It sounds like you got you question answered for your state requirements.
@Nazz Wang For California's rental laws on security deposits there are no specifics on where to keep the deposit. "In other words, you can simply put the money in your pocket or bank account and use it, as long as you have it available when the tenant moves out" (Brown, Portman, & Warner 93).
@Michaela G. As for the interest incurred on security deposits, the landlord does not have to pay interest to their tenants in all California cites. The majority of cities that have rent control requirements, require interest to be paid back to tenants except for Santa Cruz and Watsonville. There are specific cities that require interest that should be paid back to the tenant. Those cities are Berkeley, Hayward, Los Angeles, San Francisco, Santa Monica, and West Hollywood (Brown, Portman & Warner 94).
Brown, Portman, and Warner. The California Landlord's Law Book: Rights & Responsibilities 15th Edition. California: Berkeley, 2013. Print.
