When you move into rented quarters, your landlord may demand a security deposit in addition to the first month’s rent. This deposit, which is equivalent to 1 or 2 months’ rent, is set aside to ensure that you’ll honor the provisions of your lease.
Many states require that the funds be deposited in an interest-bearing account that is earmarked for this purpose. You are entitled to the interest.
When your lease expires, your landlord must return the full deposit, plus any accrued interest, provided the premises are in good shape. The conditions under which you can lose your deposit should be spelled out in your lease; read it carefully. Generally, if you damage the premises and refuse to make or pay for repairs, your landlord can use the security deposit to do so. You’re entitled to get your deposit back even if you break your lease, but your landlord has the right to sue you for breaking the lease.