Rental deposit account

The deposit account (Kautionskonto) is a special savings account for the rental deposit – and the landlord has strict legal obligations in Germany.

Legal rules (§551 BGB):

• Amount: max. 3 months' net basic rent
• Instalments: may be paid in 3 equal monthly instalments (first instalment at the start of the tenancy)
• Separation: the landlord MUST invest the deposit separately from their private assets
• Interest: at least at the usual savings rate
• Interest earnings: belong to the TENANT and are added to the deposit

Investment options:

• Deposit savings book: classic, in the tenant's name. The landlord receives the book as security
• Escrow account: the landlord opens a separate account
• Deposit insurance: you pay ~3–5% of the deposit per year as a premium instead of the full amount. Saves liquidity but costs more over the years

Alternatives to a cash deposit:

• Bank guarantee: the bank stands surety for you (costs fees)
• Parental guarantee: parents stand surety (careful: UNLIMITED liability with a voluntary guarantee!)
• Rental deposit insurance: from ~€5/month with kautionsfrei.de, Eurokaution etc.

Return:

• The landlord has approx. 3–6 months after you move out to return it
• Right of retention: only for justified claims (damage, outstanding service charge statement)
• Check on return: was the interest paid out too?