The most important parts for busy readers:

  • A tenancy law exist in Germany, which may require a rental deposit in Germany when renting an apartment from a landlord. It’s voluntary by the landlord, but usually it will be part of the rental agreement
  • There are numerous possibilities how to achieve a rental deposit, depending on the available amount of money and risk aversion – most of the times a simple savings account is being used
  • After the rental agreement has been cancelled it may take quite some time to get the rental deposit back as a tenant, but there are ways to speed up the process or free some amount of the money

Rent deposits in Germany – What You Need to Know

Usually when a foreigner or expat comes to live and work in Germany there are a few obstacles and hurdles to take until everything is going smooth. Renting an apartment, thanks to the internet, is easier then it used to be since there are websites like immoscout or immowelt to search for an apartment and a lot of people in Germany are actually speaking english, which facilitates also the process of the apartment inspection a little easier. Nonetheless, even when the almost perfect apartment has been found and the rental agreement has been signed a renter is confronted with one minor task to complete: The rental deposit

Even a lot of german residents don’t know the ins and outs of the current law and what kind of alternatives one may use as a rent deposit, therefore this article is here to help. As you may have noticed, this website is all about the topic “Mietkaution” or rent deposit – this article should cover the topic from a viewpoint of tenant in english language for foreigners and expats, coming to Germany.

There is at least one german law, which needs to be known when it comes to the rental deposit, which is §551.

What is a Deposit and why do I have to pay it?

A deposit is legal according to german law to cover any costs, which the landlord may encounter after the tenant has moved out. This may be:

  • Rent arrears
  • Service charges that have yet to be settled
  • Receivables from a completed service charge settlement that have not yet been paid
  • The late return of the rental object (according to § 546a BGB)
  • Damages for which the tenant is responsible and resulting claims for damages
  • Defects, due to cosmetic repairs carried out or not carried out correctly
  • The violation of the obligation of deconstruction by the tenant

A deposit usually may take up to 3 months of rent but without any additional costs being added. So when talking about rent it’s the bare rent without any costs like water, heat, electricity, etc. Citing the civil law, the deposit should:

The lessor shall deposit a sum of money given to him as security with a credit institution at the usual interest rate for savings deposits with three months’ notice. The contracting parties may agree on another form of investment. In both cases, the investment must be made separately from the landlord’s assets and the tenant is entitled to the income. They increase the security. In the case of accommodation in a student or youth hostel, the landlord is not obliged to pay interest on the security deposit.

Usually the landlord will handle all of the deposit for the tenant, the tenant only needs to provide the money for it. For a tenant this would be the easiest option. Be aware about the following fact according to the law: When the landlord will store the money, it should be kept separate from the personal assets. Also as a tenant you will receive a confirmation that the money has been deposited at a bank and will only be used as a deposit for the apartment being rented.

One important fact from the law should be also acknowledged, which is:

If a sum of money is to be provided as security, the tenant shall be entitled to three equal monthly installments. The first partial payment is due at the beginning of the tenancy. The further partial payments shall be due together with the immediately following rent payments.

Which does bring a lot of relieve to everybody choking on the idea of paying 3 times the rent on an additional account upfront the actual commencement of the lease. But there are also other options, besides a paying it in 3 rates.

How to pay the rent deposit (Mietkaution) in Germany?

Depending on the product one will choose and if the landlord or tenant will take care about the opening of the savings account the actual payment may be different. There are the following options available:

  • Cash deposit (which comes down to a savings account being opened by the landlord)
  • Rent deposit savings account – may be opened by the landlord or the tenant
  • Rent deposit guarantee (also called rent deposit insurance) – only available for the tenant
  • Bank guarantee – only available for the tenant
  • Rental deposit with stocks – only available for the tenant

A cash deposit works this way: The tenant will pay the deposit in cash to the landlord, the landlord will open the account. It’s still common in Germany, though not recommended due to scams.

A Rent deposit savings account may be opened by the landlord or the tenant, there are a few german banks available which offer this service, you may use the rent deposit comparison to get an overview about the conditions.

If a tenant does not have the money available for the deposit, one may also use an insurance (Kautionsversicherung) or bank guarantee (Bankbürgschaft). The good thing about it: One does not have to pay the whole deposit – therefore one will pay a monthly or yearly fee (3,5% – 5,25%) so that an insurance may cover any damages. If the insurance will pay the landlord in case of the damage, as a tenant one will have to pay this money to the insurance afterwards.

Rental deposit with stocks is a fairly new way in Germany and few landlords know about the option. In a lot of countries stocks are more common than in Germany, so this might also be a viable option as a tenant, but one has to convince the landlord to accept it, since the value of the pledged stocks may get less during time.

Rent deposit comparison

You may use this rent deposit comparison calculator to get a quick overview of the market (most of the times one will only find insurance products) and if one wants to choose a rent deposit as a tenant this is a very good resource to get started:


If you are looking for one of the most used rental deposit accounts, which may be opened online without any hustle and which is being widely acknowledged, you may be interested in trying the DKB rental deposit account.

How long does a landlord have time to return a deposit in Germany?

If there are still outstanding claims which cannot be asserted at the end of the tenancy (e.g. regular service charge settlement), it is also possible for the landlord to retain part of the deposit. However, the other part can be debited from the rental deposit account in advance.

The following requirements must be met for the return of the rental deposit:

  • The rental relationship must have been terminated or ended.
  • The landlord no longer has any claims in the form of withholdings due to defects in the apartment or costs in relation to the service charge statement.

If these prerequisites are met, you can reclaim your rent deposit, or at least partially reclaim it. It is possible to reallocate the rent deposit at any time. The advantage of a partial payment would be for the tenant that he can already set up the deposit amount for the upcoming property and thereby create the necessary liquidity. If this is not the case, for example, or if the new rental deposit is not to be set up as a deposit account, a rental deposit guarantee or a bank guarantee are options for not depositing a deposit.

Can landlords hold deposits?

Short answer: Yes – Long answer: It depends. Therefore we created this table to give an overview, when and for how long a landlord may hold back a deposit:

Situation of the tenantDeposit repayment scheme
Claims of the tenant are time-barred6 months after termination of the tenancy, the limitation period for claims arising from a tenancy begins - the period itself lasts 3 years. Within this period a reclaim of the rent deposit is possible, should this not be done by the tenant within the period, he has no claim to the repayment afterwards.
Outstanding service charge settlementA service charge settlement can take up to 12 months from the time of moving out - within this time the rent deposit can be held back. However, it only makes sense to hold back the deposit if an additional payment of the ancillary costs is actually expected. Should this actually be the case, however, a partial payment of the deposit can be requested, less the costs still to be expected.
Claims on the part of the landlord are examinedAn examination of the claims on the part of the landlord can last from moving out of the dwelling for 6 months. This is to check whether something claims could exist due to not or insufficiently executed cosmetic repairs and resulting costs for the landlord, but also missing rent payments.
Claims on the part of the landlord are still valid and can be assertedIf there are claims of the landlord on the rent deposit, there is no deadline until when the rent deposit must be paid back. This may be the case, for example, in a legal dispute, if the landlord still retains the deposit until legal certainty is given.
Everything is completedIf all outstanding costs have been covered and the apartment has been handed over without any defects, and the service charge settlement has been completed, the refund of the rent deposit can be made immediately, i.e. within few working days (3-4).

After all a rental deposit is not that hard, there are only a few things to know about it. Even in other countries it applies, often with slightly different regulations. If you ever plan to live in Belgium or the Netherlands, will support you in finding the right deposit account, for Austria it would be

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Autor: Mietkaution Redaktion

Unsere Redaktion setzt sich aus erfahrenen Finanzexperten zusammen. Damit Sie als Mieter und Vermieter auf dem neuesten Stand bleiben, sorgen unsere Redakteure regelmäßig mit aktuellen Artikeln dafür, dass Sie über alle Themen rund um die Mietkaution schnell und unkompliziert informiert werden.