Tennessee 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 Tennessee must be kept in a separate account and not mingle with personal or business funds in any bank or other lending institution subject to regulation by the state of Tennessee or any agency of the United States government.
{{ state }} security deposit
limits
There is no statewide cap on the amount of security deposit in Tennessee. Based on the national average security deposit, 1 to 2 months’ rent is recommended.
{{ state }} security deposit interest
State law security deposit doesn’t mandate keeping funds in an interest-bearing bank account, thus you don’t need to pay any interest on security deposit in Tennessee. The security deposit interest rate equal to zero.
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 recommended
No official guidelines
Security deposit escrow account isn’t required. But, must hold funds in a separate account used only to hold the security deposit in any bank or other lending institution in Tennessee or any agency of the United States government. Inform the tenant of the location of the security deposit bank account in Tennessee.
Unpaid rent, property damage, cleaning costs, and lease violations
30 days
Additional resources
ARTICLE
How to collect security deposits
FAQs
How much security deposit can a landlord charge in Tennessee?
There is no statewide Tennessee security deposit limit, but one to two months' rent is generally recommended. You can also charge the first and last month's rent, along with the deposit amount.
Is interest required on tenant security deposits in Tennessee?
No, there are no official guidelines about paying Tennessee security deposit interest, as you’re not required to use an interest-bearing landlord-tenant security deposit bank account in Tennessee.
How should I issue a security deposit receipt to tenants in Tennessee?
Create a written notice (which acts as a receipt) showing the location of the security deposit bank account in Tennessee. You can also include the deposit amount and account details, but you’re not legally required to do so.
How many days to return a security deposit in Tennessee?
You must return the deposit in full or send an itemized list of deductions from the tenant's security deposit in Tennessee, along with the remaining amount, if any, within 30 days of the tenant’s move-out date.
What can a landlord deduct from a security deposit in Tennessee?
As per landlord rights security deposit rules, you can deduct for unpaid rent, damages (beyond normal wear and tear) to your property (house rental, apartment, condo), and costs from a lease breach.
Can a security deposit be used for unpaid rent in Tennessee?
Yes, funds from the security deposit bank account in Tennessee can be used to recover unpaid rent, utility charges, or any other fees owed by the tenant.
Can landlords keep a security deposit for breaking a lease in Tennessee?
Yes, a landlord security deposit in Tennessee can be used if the tenant breaks the lease early, given the amount compensates for actual damages (like lost rent).
