Illinois security deposit account for landlords
Easily collect and manage deposits for every property with dedicated security deposit accounts.
Why use a security deposit account in {{ state }}
Security deposit funds are instantly separated, making move-in, move-out, and returns completely clear.
Benefits for property
owners
Repair and maintenance
Covers property damage such as paint, carpet, or floor damage, including costs caused by pets.
Fund separation
Meet state requirements for holding deposits in a dedicated tenant security deposit account.
Streamlined returns
Simplifies refunding tenants while accounting for deductions like cleaning or unpaid utilities.
Benefits for tenants
Fair protection
Funds are protected from misuse, covering only actual repair costs like cleaning, carpet replacement, or floor damage.
Transparency on deductions
Tenants can clearly see allowable charges, protecting against unfair claims on normal wear and tear.
Savings potential
Deposits may be held in a tenant security deposit account or rental deposit account that earns security deposit interest, helping tenants recover more than they put in.
{{ state }} security deposit account
Each tenant’s security deposit in Illinois must be kept in a separate security deposit bank account in an Illinois-based financial institution and must be interest-bearing.
{{ state }} security deposit
limits
There is no maximum security deposit in Illinois. Based on the national average security deposit, you can connect anywhere between 1 to 2 months’ rent.
{{ state }} security deposit interest
State law security deposit requires landlords to pay interest on security deposit in Illinois if it is held for at least six months and there are at least 25 units in your building/complex. Your landlord must pay you the security deposit interest rate or apply the interest as a credit to your rent every 12 months.
Go beyond standard security deposit accounts
Collect, return, and track deposits by tenant and
property, even when funds are held in external accounts.
{{ state }} security deposit accounts
Hold each security deposit in separate non-interest or interest-bearing accounts that earn up to [v="apyvalue"] APY².
Unlimited accounts for all entities
Manage deposits for all entities under one login — LLCs, corporations, partnerships, and individuals.
Free online payments
Collect rent and deposits online for free and easily return deposits via ACH, wire, or check.
Automated bookkeeping
Track and tag payments to the right tenant and property — automatically.
Essentials for every door
Everything you need for every part of the rental process.
Lease creation and e-sign
Upload or create and e-sign state-specific leases online.
Free tenant screening
Screen tenants online for free — instantly verify credit, background, evictions, ID, and income.
Property-specific accounts
Open unlimited checking and savings accounts to easily separate funds for all your properties with no monthly maintenance fees.
{{ state }} security deposit rules
No legal limit, but 1 to 2 months' rent is recommended
Separate interest-bearing accounts with an Illinois-based, federally insured financial institution.
Unpaid rent, repair damages beyond normal wear and tear, cleaning, and lease violations
45 days
Additional resources
ARTICLE
How to collect security deposits
FAQs
How much security deposit can a landlord charge in Illinois?
There is no limit to how much security deposit you can request. However, the most common practice is to charge an amount equal to one month’s rent. In 2026, the average rent in Illinois is approximately $1,800, so a typical Illinois security deposit limit for many rentals falls in that range. You can collect first and last month's rent plus a security deposit to ensure you’re protected against potential damages or non-payment.
Is interest required on tenant security deposits in Illinois?
Yes, under the Security Deposit Interest Act, Illinois security deposit interest must be paid if the rental consists of 25 or more units and the deposit is held for at least six months. You can pay the interest in cash or apply it as a credit to the rent every 12 months. To stay compliant, you should maintain a dedicated landlord-tenant security deposit bank account in Illinois to keep these funds separate and track any interest accrued for your tenants.
How should I issue a security deposit receipt to tenants in Illinois?
When you receive the deposit, provide a written receipt that includes the amount, the date, and the rental unit's address, along with your name and signature.
How many days to return a security deposit in Illinois?
If you are a landlord with a building of five or more units, you have 45 days to return the tenant's security deposit Illinois funds. If you are withholding any portion for repairs, provide an itemized statement of damages within 30 days of the tenant vacating.
What can a landlord deduct from a security deposit Illinois?
Illinois landlord rights security deposit rules allow you to deduct for unpaid rent, cleaning services (beyond normal wear and tear), and physical damage to the property (house rental, apartment, or condo). If you withheld funds in bad faith, you may be liable for double damages plus attorney's fees.
Can a security deposit be used for unpaid rent in Illinois?
Yes, you can use a security deposit to cover unpaid rent once the tenant has moved out. To handle these funds correctly, many landlords maintain a security deposit escrow account in Illinois to keep the deposit separate from personal business funds.
Can landlords keep a security deposit for breaking a lease in Illinois?
If a tenant is breaking lease terms early, the landlord security deposit Illinois rules allows you to use the funds to cover lost rent or costs related to re-renting the unit.
