I did not offer any compensating factors like a cosigner or double the security deposit. 

Technology allows us to exchange documents securely online.Browse this forum, and you will see about 20 tax accountants sharing knowledge here.

Typically you can buy and sell homes with no credit, but that means that you have to prove to other people that you can use their money to further themselves with the weight of bad credit holding you down.

Is this a secure strategy for decreasing vacancies?

I am weighting the cost/benefit options at this point.  

It also helps should you want to secure financing from that bank in the future.  3. 

It has worked out extremely well with unbelievable returns in the 30-40% return rates not including the equity appreciation of now having secure long term tenants paying huge lease rates.

Is it legal to put a tenant's (or multiple tenants') security deposit into a savings account and then collect the interest that the deposit makes for you?

Is this violating any sort of securities laws?

In doing this, their money is secured by both a hard asset and a personal guarantee.