Holding the Kaution: separate, safe and with interest
Where to keep your tenant's Kaution (deposit), how much you can ask for, and who gets the interest.
Keep the Kaution separate from your own money, in a deposit account that earns interest and is protected if you go bankrupt. The interest belongs to the tenant and is paid out with the Kaution when the tenancy ends.
The rules for holding the Kaution
The law sets how much Kaution you can take, in what form, and how you must hold it. Sort out these points before the tenant moves in.
- 1
The most you can ask for
The Kaution can be at most three months' net base rent. Anything you agree beyond that is void.
- 2
The tenant can pay in three instalments
The tenant can pay in three equal monthly instalments. The first is due at the start of the tenancy.
- 3
Use a separate account
A cash Kaution belongs in its own deposit account, not in your private account.
- 4
The interest is the tenant's
The interest the account earns belongs to the tenant. It is added to the Kaution.
- 5
Other forms of Kaution
Instead of cash, the tenant can also give you a pledged savings book or a guarantee.
- 6
Keep a record
Keep a note of the amount, the bank and the interest.
Why this matters
Under § 551 Abs. 3 BGB, you must put a cash Kaution in a bank account that earns interest, and keep it separate from your own money. The interest it earns belongs to the tenant.
General information, not legal advice.
Frequently asked questions
How much Kaution can I ask for?
The Kaution can be at most three times the net base rent, which is the rent without the separately listed running costs (§ 551 Abs. 1 BGB). Anything above that is invalid and can be claimed back.
Who gets the interest on the Kaution?
The tenant gets the interest. It is added to the Kaution and paid out with it when the tenancy ends (§ 551 Abs. 3 Satz 3 BGB). Student and youth halls of residence are the exception (§ 551 Abs. 3 Satz 5 BGB).
What happens if I keep the Kaution in my private account?
If the Kaution is in your private account, the tenant can hold back rent up to the amount of the Kaution. The tenant can do this until you prove you are holding it correctly. So for a cash Kaution, open a separate deposit account that earns interest.
Also in this topic: Kaution settlement: a template for landlordsEigenbedarfskündigung: how to justify itLandlord termination of a tenancy in Germany (2026, § 573 BGB)
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