Overview
Connecticut security deposit laws are governed by CT Gen. Stat. § 47a-21. Connecticut is one of the most tenant-friendly states, with mandatory interest payments, strict escrow requirements, and special protections for tenants over 62. The state also requires landlords to provide annual interest statements. Using security deposit management software helps ensure these requirements are met consistently.
Maximum Security Deposit
Connecticut's deposit limits depend on the tenant's age:
Standard Limit (Under 62)
For tenants under 62 years of age, the maximum security deposit is two months' rent.
Senior Limit (62 and Over)
For tenants 62 years of age or older, the maximum security deposit is one month's rent.
Return Timeline
As of October 1, 2023, Connecticut shortened the return deadline. Landlords must return the deposit within:
- 21 days after termination of the tenancy, OR
- 15 days after receiving written notification of the tenant's forwarding address (whichever is later)
What Must Be Included
Within this period, landlords must deliver either: (Massachusetts has even stricter rules—see Massachusetts security deposit laws.)
- The full security deposit plus accrued interest, OR
- The balance after deductions, plus a written itemized statement of damages and their costs
Interest Requirements
Connecticut requires landlords to pay interest on security deposits.
Interest Rate
The interest rate is set annually by the Connecticut Department of Banking:
- 2025 rate: 0.52%
- 2024 rate: 0.5%
The rate fluctuates based on economic conditions and is published each year.
Late Payment Exception
The landlord does not have to pay interest for any month when the tenant was 10 or more days late with rent and was not charged a late fee.
Annual Statement Requirement
By January 31st of each year, landlords must send each tenant a statement showing:
- The security deposit amount
- Interest earned during the previous year
Escrow Requirements
Connecticut has strict storage requirements:
- Security deposits must be kept in an escrow account
- The account must be at a financial institution located in Connecticut
- Using an out-of-state account violates the law
- Deposits cannot be commingled with the landlord's personal or business accounts
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damages beyond normal wear and tear
- Other lease violations
Normal wear and tear cannot be charged to the tenant.
Penalties for Non-Compliance
Connecticut has strong penalties for violations:
Failure to Return on Time
If a landlord fails to return the deposit with interest or provide written notice of damages within the statutory time limits:
- May be required to pay the tenant twice the amount of the security deposit
Attorney's Fees
Courts may award court costs and reasonable attorney's fees when a landlord fails to comply with security deposit requirements.
Common Compliance Questions
Does the two-month limit include pet deposits?
Yes. The two-month maximum includes all security deposits, including pet deposits. You cannot collect two months' rent as a security deposit plus an additional pet deposit. If you want to charge for pets, it must come out of the two-month total. Some landlords charge higher monthly pet rent instead, which is permitted.
Where exactly must I hold the deposit?
The deposit must be held in a Connecticut bank or credit union in an escrow account. You cannot commingle it with your personal or operating funds. Within 30 days of receiving the deposit, you must notify the tenant in writing of the bank name and address. Failure to comply can result in twice the deposit amount as damages. See how Passive works to help manage these escrow requirements.
What if I sell the property before the tenant moves out?
You must transfer the security deposit to the new owner and notify the tenant in writing of the transfer and the new owner's name and address. Until you do both, you remain liable for returning the deposit. Get a receipt from the new owner documenting the transfer amount for each tenant.
Can tenants over 62 get their deposit back early?
Yes. Connecticut law provides that tenants age 62 or older can request return of their security deposit at any time during the tenancy. The landlord must return it within 30 days, less any amounts owed. This applies regardless of lease terms. Many landlords are unaware of this provision—ignoring the request can result in penalties.