Security Deposit For Apartments in Germany: Everything You Need to Know as a Tenant
- Selma
- Sep 23
- 7 min read
You've finally found your dream apartment, but then comes the question about the security deposit (Mietkaution). New tenants in Germany must provide up to three months of net cold rent after signing the rental agreement. This can quickly amount to a substantial sum. This comprehensive guide explains everything important about security deposits in Germany - from the legal foundation to repayment after moving out.
What is a Security Deposit and Why Do You Need It?
The security deposit (Mietkaution) is a security payment that you provide at the beginning of the rental relationship. It serves to secure any potential claims by the landlord – for example, from rent arrears, utility cost demands, or compensation for damages.
The deposit protects your landlord against the following cases:
Outstanding rent payments
Unpaid utility costs
Damage to the apartment caused by you as tenant
Neglected cosmetic repairs
Expected back payments from utility cost statements
Important to know: A security deposit is not mandatory under German law. There is no legal requirement for landlords to demand a deposit from tenants. However, nearly all landlords in Germany require a security deposit in practice.
How High Can Your Security Deposit Be?
The deposit may not exceed three months of cold rent – meaning without advance payments for utilities or flat-rate utility costs – according to § 551 of the German Civil Code (BGB). Only the net cold rent serves as the basis for calculation and must be precisely stated in your rental agreement.
Calculation example: With a net cold rent of €800, the deposit may be a maximum of €2,400. In practice, the amount varies depending on location and rent level between €1,500 and €5,000. The decisive factor remains the legal upper limit of three net cold rent payments.
No Subsequent Increase Possible
The amount of the security is regulated in the rental agreement. Landlords may not increase it subsequently, even if the rent increases. A subsequent increase in the security deposit amount is not possible. What counts is the sum agreed upon in the signed contract.
Installment Payment: Your Legal Right
One of the most important pieces of information for you as a tenant: You may pay the security deposit in three installments. The first installment is due at the beginning of the rental relationship, the others in the following months (§ 551 Para. 2 BGB). A landlord may not refuse installment payments.
How installment payment works:
1st installment: Due at the start of tenancy
2nd installment: With the second rent payment
3rd installment: With the third rent payment
The landlord cannot prohibit this. The landlord also may not make signing the rental agreement dependent on whether the tenant pays the full deposit immediately.
Caution: Termination Without Notice for Payment Default
New Federal Court of Justice ruling 2024/2025: For rental agreements concluded after April 30, 2013, there is an increased risk of termination if the deposit is not paid! According to § 569 Para. 2a BGB, the landlord may terminate without notice if the tenant is in arrears with the deposit payment in an amount equivalent to twice the net cold rent. Being behind on two deposit installments is sufficient.
How is Your Security Deposit Invested?
Separate Investment is Mandatory
The landlord must invest any monetary sum provided as security with a credit institution at the interest rate usual for savings deposits with three months' notice. The security deposit must be placed in an insolvency-proof account separate from the landlord's assets.
Why is this important? The separate investment protects your money in case of the landlord's possible insolvency.
Interest Belongs to You
After the interest rate increases of 2024/25, many deposit accounts are again at 0.25% – 1.0% p.a. (as of June 2025). If the bank pays interest on the deposit account balance, it belongs to you as the tenant. Most deposit accounts are poorly or not at all interest-bearing. Some banks charge a fee for opening. In a Finanztip sample in January 2025, interest rates were at most 0.5 percent per year.
Alternative Investment Options
Pledged savings account: You can set up your own deposit account. To do this, you open a savings account in your name and pledge it in favor of the landlord.
Daily savings account: You could also invest the security deposit in a good daily savings account. These are currently significantly better interest-bearing at an average of 2.85 percent than simple deposit accounts. However, the procedure is complicated since a trust account must be established.
Alternatives to Cash Deposits
Security Deposit Guarantee
With a bank guarantee, the bank commits to the landlord to cover the deposit amount. A clear advantage here is that you as the tenant don't have to provide the deposit.
Current costs 2025: For a security of €1,000, costs can be €45 to €75 per year. You must pay a processing fee, which is typically between 1.5% and 3.5% per year.
Security Deposit Insurance
With security deposit insurance, an insurance company guarantees your security deposit. This means: Instead of a monetary amount, you deposit a guarantee certificate from the insurance company with the landlord as security.
Our recommendation: We advise against security deposit insurance. If you have the option to pay the deposit in cash, you should choose this route. The reason: You continuously pay fees and are still obligated to pay damages.
Security Deposit Repayment: What You Need to Know
Waiting Period After Moving Out
There is no fixed deadline in the law by which your landlord must release the security deposit after moving out. According to case law, it is acceptable for him to make you wait up to six months for your deposit.
There is no fixed repayment deadline by law; three to six months after moving out are usual. Security deposit repayment does not always occur immediately at the end of the rental period. Landlords have the right to take time to check any claims against tenants, so repayment can take up to 6 months (in extreme cases, one year).
When May the Landlord Withhold Money?
Current case law 2024: The Federal Court of Justice decided that landlords can also withhold the deposit if the settlement of damages only occurs after more than six months, provided the claims were asserted beforehand.
Your landlord may only withhold money from the deposit if justified claims exist:
Rent debts: If you still have rent arrears or still need to pay utility costs, your landlord may use the deposit for this
Damage: Damage to the rental property through intent or negligent behavior
Cosmetic repairs: With valid clauses in the rental agreement
Outstanding utility costs: The security deposit also secures claims not yet due that arise from the rental relationship and its settlement
What Constitutes Normal Wear and Tear?
Normal wear and tear on the rental property may not be objected to by landlords or deducted from the security deposit. This includes:
A limited number of drill holes in walls
Normal wear on floors and carpets
Minor damage to tiles
Normal wear on sanitary facilities
Your Rights as a Tenant
Demanding Proof of Proper Investment
As a tenant, you are entitled to demand proof that the landlord has invested the deposit according to law with interest and independent of his private assets in a separate account.
Recovery Demand After Six Months
You should demand the deposit back in writing after moving out of the apartment. You should point out that no defects were found during handover or that you have since remedied the defects.
If the landlord has not contacted you about settling the deposit or made demands by about six weeks after the tenant's move-out, then you should ask him to settle the deposit.
Statute of Limitations
The tenant's claim for deposit repayment becomes statute-barred after three years according to the law valid since January 1, 2002 (§ 195 BGB).
Financing the Security Deposit: Your Options
If you don't have enough money for the deposit, there are various possibilities:
Overdraft Credit
If only a few days need to be bridged after paying the deposit until the next money comes into the account, the overdraft credit (authorized account overdraft) is an option.
Installment Loan
Another possibility is financing with the help of a personal loan. You determine the term and monthly repayment installments yourself.
Family Guarantee
If your own money is not sufficient to pay the security, you can alternatively apply for a security deposit guarantee. Typically, family members provide the guarantee, usually parents guarantee for their children.
Tips for Smooth Deposit Handling
When Making Payment
Documentation: It is strongly advisable to make deposit payments separately and to note expressly on the receipt, transfer, or crossed check for which apartment, by whom, when, and how much was paid as deposit
Safekeeping: Keep all payment receipts carefully
When Moving Out
Create a detailed handover protocol
Document the apartment's condition with photos
Demand the deposit back in writing
State rental period, handover date, and the exact amount including interest that you expect back
Special Situations
Change of Ownership
Since September 1, 2001, there has been new legislation: The purchaser of the rental property is liable for the deposit, regardless of whether the deposit was handed over to him (§ 566a Sentence 1 BGB). If an apartment or rental house is sold, the paid security deposit immediately transfers to the new owner. Therefore, tenants have no reason to worry that the security deposit could be lost.
Conclusion: Well-Informed to Your New Home
The security deposit is an important component of the rental agreement that protects both you as tenant and the landlord. With the knowledge from this guide, you are well-equipped:
Your most important rights:
You may pay the deposit in three installments
You are entitled to proper investment and interest
You can demand repayment after at most six months (if no justified claims exist)
You must pay the deposit in three equal monthly installments according to law; the landlord must manage the money separately, with interest, and in trust
What you should avoid:
Payment without proper documentation
Waiving handover protocols
Accepting unclear regulations in the rental agreement
With this knowledge, you can confidently enter negotiations with landlords and ensure that your deposit is handled properly. Well-documented deposit handling saves both parties a lot of trouble and stress later on.
This guide covers German rental law and regulations. Laws and practices may differ in other countries. Always consult with local legal experts for specific situations.
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