By law, landlords are allowed to take a security deposit from the tenant before starting a lease. These same laws, set by state specific statutes, also operate to limit landlords on the amounts they can charge when implementing a security deposit into the lease. In addition to these laws, many cities also have their own ordinances pertaining to security deposits, dictating not only how they can be used but that security deposit interest must be given to tenants. In locations where these laws are in place, interest must be given to landlords based on the amount of the security deposit. After the tenant has rented for more than a month, security deposits in these cities will take on an interest rate, which can vary widely depending on the city-specific ordinance. Normally, security deposit interest must be provided on all deposits, including rent deposits, key deposits, or damage deposits, in the January of the year following. Landlords and tenants should confirm security deposit interest regulations with their local city chamber of commerce.