How to Invest a Security Deposit for Interest

Some landlords take the security deposit and put it away in a safe place. The money just sits there and does not do anything for the entire length of the lease. If you have money just sitting somewhere, you might as well be earning interest on it. Here are a few ways that you can invest a security deposit for interest. 

High Yield Savings

There are a number of banks out there that are now offering high yield savings accounts. With these savings accounts you can earn as much as 5% per year on your money. With these savings accounts, you can save your security deposits in an FDIC insured account and bring in a decent return on it at the same time. With this method you can take out the money at any point and not have to worry about paying penalties of any sort. 

Certificate of Deposit

Another option that you have is to put the money in a CD for the length of the lease. This also allows you to have your money in an FDIC insured account. The downside to this method is that you may have to pay penalties if you have to remove the money early. 

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