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. Cash deposit or deposit insurance? We explain both — 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?
You have two ways to provide the security. With a cash deposit you place the sum in the blocked account — the money stays yours and comes back with (today’s modest) interest, but is tied up until then. With deposit insurance you instead pay an annual premium and tie up no capital. That gives you the freedom to use your money: it makes sense above all if you don’t have three months’ rent to spare — or if you’d rather invest the money and your expected return is higher than the premium. Which way is better depends on your liquidity and on what your money earns elsewhere.
Cash deposit or insurance: what costs what?
tied up, returned at the end with interest
premiums over 7 years
A cash deposit ties up CHF 5,040, but you get it back at the end. The insurance costs about CHF 1,764 in premiums over 7 years — in return you tie up no capital.
Typical premiums: around 4–5% of the deposit per year (sometimes with a minimum). Good to know: deposit insurance is not liability cover — it settles a justified claim by the landlord first, then recovers it from you.
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?
- It depends on your situation. It ties up no capital — useful if you don’t have three months’ rent to spare, or if you’d rather invest the money and your expected return beats the premium. In return the premiums are an ongoing cost, while a cash deposit comes back (with modest interest) at the end. Both are allowed — decide by liquidity and return.
- 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).