Rental deposit in Germany: what a landlord may ask and how he must hold it
The deposit is your money, held in trust by the landlord, and the law caps it whatever your lease says.
Checked by Radif Partners · Editorial policy · Method
Your deposit: maximum and instalments
Maximum lawful
€2,340
| Asked above the limit | €160 |
| Three instalments of | €780 |
A German rental deposit (Mietkaution) secures the landlord’s claims under the tenancy, such as unpaid rent, a service-charge top-up or damage. Under Section 551(1) of the Civil Code (BGB) it may not exceed three times the monthly rent excluding service charges shown as a flat rate or advance payment. With a base rent (Nettokaltmiete) of €980 and advances of €240, the cap is €2,940.00. The cap covers all forms of security together, so it also applies when a cash deposit is combined with a guarantee. A cash deposit can be paid in three equal monthly instalments: here €980.00 when the tenancy starts on 1 December 2026, then one with each of the rents due on 1 January 2027 and 1 February 2027. The landlord must keep the money at a bank, separate from his own assets, earning at least the usual rate for savings with three months’ notice; the interest is yours. If you fall behind on the deposit by an amount equal to two months’ base rent, €1,960.00 here, he may terminate without notice under Section 569(2a) BGB.
What the deposit is for
The deposit covers every claim the landlord may have under the tenancy: rent arrears, a top-up from the service-charge statement, compensation for damage beyond normal wear, costs of an eviction. It is not an advance on your last rent. If you stop paying in your final months and point to the deposit, you are in arrears, because the deposit is meant for the period after you leave, when claims come to light. When you get it back is explained on the deposit refund page.
The cap: three months’ base rent
Section 551(1) BGB limits any security you have to provide to 3 times the monthly rent without service charges shown as a flat rate (Pauschale) or advance (Vorauszahlung). If your rent is all-inclusive with no separate service charges, that rent is the basis. For three typical flats with a tenancy starting on 1 December 2026:
| Base rent | Advance | Maximum deposit | Per instalment | Termination from |
|---|---|---|---|---|
| €640 | €180 | €1,920 | €640.00 | €1,280 in arrears |
| €980 | €240 | €2,940 | €980.00 | €1,960 in arrears |
| €1,450 | €310 | €4,350 | €1,450.00 | €2,900 in arrears |
The cap applies to all security combined. A landlord who asks for a guarantee of €1,500 on top of a full cash deposit of €2,940 goes over it by €1,500. The excess is void; Section 551(4) BGB rules out any agreement to your disadvantage.
Three instalments, and what happens if you fall behind
You may pay a cash deposit in three equal monthly instalments (Section 551(2)). The first is due when the tenancy begins, meaning the agreed start date, not when you sign. The second and third fall due with the next two rent payments. With €980 base rent that is three payments of €980.00 on 1 December 2026, 1 January 2027 and 1 February 2027. The small calculator above splits any deposit this way.
If you do not pay, the landlord has a special right: Section 569(2a) BGB allows termination without notice once you are behind by an amount equal to two months’ rent, again without service charges. No warning letter or deadline is needed. The termination lapses, however, if you clear the arrears within two months of an eviction claim being served, or a public body undertakes to pay, as Section 569(3) No. 2 provides.
Forms of security
- Cash or bank transfer: the usual case; the landlord invests the money.
- Pledged savings account in your name (Kautionskonto, Sparbuch): the account is yours; the landlord holds a pledge and can only draw on it for valid claims.
- Bank or personal guarantee (Bürgschaft): the guarantor pays if you do not. It counts in full towards the cap.
- Deposit insurance (Kautionsversicherung): a guarantee bought for a yearly premium. The landlord need not accept it, and the premium is gone.
Other investments than a savings account, such as a fund, are allowed under Section 551(3), second sentence, if both sides agree. The money must still be kept apart from the landlord’s assets and the returns are yours, but a market loss then reduces your deposit.
Separate account and interest
The landlord must place a cash deposit with a bank at the usual rate for savings with three months’ notice, separately from his own assets (Section 551(3), first and third sentences). The separation is what actually protects you: if he becomes insolvent or his creditors enforce against him, a clearly labelled trust account stays yours. So ask for confirmation. The interest increases the security; it is not paid out every year but added to the deposit and returned with it. In student or youth halls there is no duty to pay interest.
If you paid too much
If the landlord received more than the cap, you can claim the excess back straight away, not only when you move out. In the example with €3,600 instead of €2,940, that is €660. Write to the landlord, state the base rent and the cap, and set a deadline. The deposit calculator checks cap, instalments and interest for your own lease. Note also that the landlord’s claims for damage to the flat become time-barred just six months after he gets it back (Section 548 BGB), which matters a great deal when the deposit is settled at the end.