The rental deposit: at most 3 months’ rent — and it stays your money
The deposit may not exceed three months’ rent and must sit in a blocked account in your name. The money stays yours, the interest is yours, and it is protected if the landlord goes bankrupt. Why deposit insurance costs you dearly — with a calculator.
Statutory maximum · residential rental deposit
The landlord may not demand more. The money sits in a blocked account in your name — it stays yours, with interest, and is protected if the landlord goes bankrupt.
How high can the deposit be?
For dwellings the security may be at most three months’ rent (CO Art. 257e). What counts is the net rent, excluding service charges. If the landlord demands more, the excess is invalid — you can reclaim it at any time. For commercial premises there is no such cap.
The blocked account: why it protects your money
The deposit doesn’t belong to the landlord — it belongs to you, just temporarily blocked. That is why the law requires a rental deposit account (blocked account) at a bank, held in your name. This has three concrete consequences:
- The interest on the account is credited to you — not the landlord.
- If the landlord goes bankrupt, your deposit does not fall into the bankruptcy estate. It is separate from their assets.
- It is paid out only with your consent (or a court/conciliation decision) — the landlord cannot access the money alone.
Cash deposit or deposit insurance?
Instead of depositing the money, providers offer deposit insurance: you pay an annual premium and the insurer guarantees the sum to the landlord. It sounds convenient, but it is usually a bad deal — the premiums are lost, whereas a cash deposit comes back with interest at the end.
Cash deposit vs deposit insurance
returned at the end (+ interest)
over 7 years · not refunded
The insurance costs you CHF 1,764 — money you never see again.
After about 20 years the premiums even exceed the deposit itself.
Typical premiums: around 4–5% of the deposit per year (sometimes with a minimum). The cash deposit is returned with interest; premiums are lost. On a claim the insurer demands the money back from you — it is not liability insurance.
Getting it back after you move out
After the handover, the blocked account is released. The bank pays out when both sides agree in writing — or when a court or conciliation decision is in place. If the landlord refuses to release it without cause, there is a safeguard:
Frequently asked questions
- How high can the rental deposit be?
- For dwellings, at most 3 months’ rent (net rent, excluding service charges), CO Art. 257e. Any higher amount demanded is invalid and can be reclaimed.
- Do I have to pay the deposit when I get the keys?
- No. You only have to pay once a blocked account in your name is opened. Cash or a payment into the landlord’s account may not be demanded.
- Who gets the interest on the deposit account?
- You do. The blocked account is in your name, the interest is credited to you, and the money is protected if the landlord goes bankrupt.
- Is deposit insurance worth it?
- Usually not. The premiums are lost (a cash deposit comes back with interest), and on a claim the insurer demands the money back from you — it is not liability insurance. The Tenants’ Association advises against it.
- What if the landlord won’t release the deposit?
- If they assert no claim within one year of the tenancy ending (debt-collection/lawsuit/conciliation), the bank repays the deposit to you on request, even without their signature (CO Art. 257e).