Minnesota 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 Minnesota should be kept in an interest-bearing account, which need not be an escrow or trust account. It means you can keep funds in a savings security deposit bank account in Minnesota as long as it pays interest.
{{ state }} security deposit
limits
There is no limit on the maximum security deposit in Minnesota that you can charge. Based on the average security deposit across states, many landlords charge up to 2 months’ rent.
{{ state }} security deposit interest
State law security deposit mandates keeping funds in an interest-bearing account, which means you must pay interest on the security deposit in Minnesota. The security deposit interest rate is 1% per annum (simple, non-compounded) and starts on the first day of the month after full payment and ends when the deposit is returned.
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 official guidelines. 1 to 2 months’ rent is recommended.
No legal guidelines to keep funds in a separate escrow account.
Repairs, lease violations, and cleaning costs
21 days
Additional resources
ARTICLE
How to collect security deposits
FAQs
How much security deposit can a landlord charge in Minnesota?
There is no official Minnesota security deposit limit that a landlord can charge. However, it is common practice for a Minnesota security deposit limit to be equal to one or two months' rent, including the first and last month's rent.
Is interest required on tenant security deposits in Minnesota?
Yes, a landlord-tenant security deposit bank account in Minnesota must earn interest. You must pay Minnesota security deposit interest at a rate of 1% per annum (simple, non-compounded). This starts the first day of the month after full payment and ends when the deposit is returned.
How should I issue a security deposit receipt to tenants in Minnesota?
Minnesota law doesn’t mandate a written receipt for deposits, but it is best practice to do so. Include the deposit amount, date, and name of the rental property (apartment, house rental, or condo unit).
How many days to return a security deposit in Minnesota?
You get 21 days after the lease ends, and you receive the tenant's forwarding address to return the tenant's security deposit in Minnesota.
What can a landlord deduct from a security deposit in Minnesota?
Under landlord rights security deposit rules, you may deduct for unpaid rent, late fees, or utilities. You can also deduct for damages to the house rental, apartment, or condo that go beyond "ordinary wear and tear." If you fail to follow return rules, you could be liable for double damages plus a $500 bad-faith penalty.
Can a security deposit be used for unpaid rent in Minnesota?
Yes, you can use security deposits to recover any rent owed by the tenant after they move out.
Can landlords keep a security deposit for breaking a lease in Minnesota?
If a tenant breaches the lease terms, the landlord's security deposit in Minnesota may be used to cover unpaid rent for the remainder of the lease term. You should still give a written itemized statement within 21 days, explaining these charges.
