Published 2026-09-27 · 8 min read

Connecticut Security Deposit Law 2026: Limits, Deadlines & Deductions

Connecticut caps security deposits at two months' rent (one month for tenants 62 and older), requires return within 21 days of termination, mandates an escrow account plus annual interest, and punishes violations with twice the deposit — all under Conn. Gen. Stat. § 47a-21. A 2025 bill to cut the cap to one month for everyone died in committee, so the two-tier cap stands. Every section below is from § 47a-21.

The short version: Charge at most two months' rent (one month if the tenant is 62+). Hold it in a separate escrow account and pay the tenant interest every year at the Banking Commissioner's rate. Within 21 days of termination — or 15 days after receiving the tenant's written forwarding address, whichever is later — return the balance with interest and a written itemized statement of deductions. Violations can cost you double the deposit.

The statute table

Limits: how much can you charge?

Two months' rent for tenants under 62; one month's rent for tenants 62 or older. A tenant who paid two months and later turns 62 may demand a refund of the excess. The proposed one-month-for-everyone cap (2025 H.B. 6891) never became law, so don't let tenant advocates or stale articles tell you otherwise. First month's rent paid up front is not part of the deposit and doesn't count toward the cap.

Check your cap with the Security Deposit Max Checker.

The 21-day deadline, precisely

Return the deposit plus accrued interest, minus lawful deductions, no later than 21 days after termination of the tenancy — or 15 days after you receive the tenant's written forwarding address, whichever is later. The tenant may notify you of the forwarding address in writing after move-out, which is why the second prong exists. Send the written itemized statement of deductions with the remaining balance; a lump-sum "damages" line without specifics won't survive scrutiny.

Run the interest math with the Security Deposit Interest Calculator, and find your date with the Security Deposit Deadline Finder.

When the clock actually starts

Connecticut's deadline has two triggers, and the one that matters is whichever finishes later. The first clock runs from termination of the tenancy. The second runs from your receipt of the tenant's written forwarding address, and it gives you 15 days from that receipt. A tenant who hands you a forwarding address on the day the keys come back changes nothing — the 21-day prong is still later. A tenant who mails the address two weeks after moving out can push your real deadline past the 21-day date, which is why you log both dates in the deposit file: the termination date, and the date any written forwarding address arrived. Do not treat the deadline as 21 days from when you finished cleaning or got a repair quote; neither event appears in the statute. The practical discipline is to start the accounting in the first week anyway, because the forwarding-address prong only ever extends the window — it never excuses a statement you had not prepared.

A worked example

Say a tenancy terminates on Monday, March 2, 2026, on a unit renting for $1,600 a month with a $3,200 deposit — the two-month maximum for a tenant under 62. Counting 21 calendar days from March 2, the first deadline falls on Monday, March 23, 2026. Now suppose the tenant's written forwarding address reaches you on Wednesday, March 11, 2026: 15 days from that receipt is Thursday, March 26, 2026, which is later, so March 26 is the date that controls. Suppose the tenant left $450 of unpaid amounts owed to you and $550 of documented damage beyond their obligations — $1,000 of legitimate deductions. Handled on time, you return $2,200 plus the accrued interest, together with the written itemized statement, by March 26, and the matter is closed. Work backwards from whichever date controls: inspect and photograph in the first few days, price the deductions by the end of the first week, confirm the interest figure at the Banking Commissioner's current rate, and have the statement and payment ready days early.

Deductions and the itemized list

Deduct only for the tenant's defined obligations: unpaid rent or utility payments owed to you, and damage from the tenant's failure to comply with their statutory obligations. Every deduction must be itemized in writing and delivered within the deadline above. Connecticut gives cash-payment tenants a receipt right (§ 47a-3a), so issue written receipts for every deposit payment — the paper trail starts at move-in, not move-out.

Build the letter with the Security Deposit Deduction Letter Generator.

Move-out compliance checklist

1. Fix both clocks on day one. Record the termination date and, separately, the date any written forwarding address arrives — your deadline is 21 days from termination or 15 days from that receipt, whichever is later.

2. Confirm the escrow and interest file. Verify the deposit sat in its separate escrow account for the whole tenancy and pull the Banking Commissioner's current deposit-index rate before you calculate anything.

3. Inspect and photograph within the first few days. Walk the unit promptly and photograph every room before cleaning or repairs begin; the photos are what separate chargeable damage from ordinary condition at move-in.

4. Price deductions from records, not estimates. Tie every deduction to unpaid amounts owed or documented damage, using invoices, receipts, or your own dated repair log.

5. Itemize every dollar in writing. List the exact reason for each amount withheld alongside the balance and interest being returned — a single lump-sum figure does not satisfy § 47a-21.

6. Deliver well before the controlling date. Send the written statement, the balance, and the accrued interest inside the window; a forwarding address that arrives late extends the deadline, but never rely on that extension arriving.

7. Keep the file after you deliver. Retain the lease, escrow records, interest calculation, photos, statement, and proof of mailing together; the double-deposit penalty means a tenant can afford to challenge a sloppy file long after move-out.

Interest and where the money sits

This is Connecticut's signature requirement: the deposit must sit in a separate escrow account (§ 47a-21(h)), and you must pay the tenant interest annually at the rate the Banking Commissioner sets each year (the deposit index), either as cash or credited toward rent. Interest is paid on each tenancy anniversary and within 15 business days after early termination or early return of the deposit. The tenant forfeits interest for any month rent was more than 10 days late — unless you charged a late fee under the lease. You may not raise the rent to offset the interest obligation.

The penalty, spelled out

Violate the return rules and you're liable for twice the amount of the security deposit. If you returned the deposit but shorted only the interest, the penalty is the greater of twice the accrued interest or $10. On top of that, a knowing and willful failure to pay the deposit when due carries a fine of up to $250 per offense under § 47a-21(k) — a rare criminal-style kicker in deposit law.

Run the worked example through that penalty: on a $3,200 deposit, a violation puts twice the deposit — $6,400 — in play, before the per-offense willful-failure fine is even considered. Set against the $1,000 of legitimate deductions in the example, the trade is stark: the paperwork and the calendar are worth several times the amount most landlords are tempted to hold back informally. Connecticut also makes the interest obligation independently expensive to ignore, because shorting interest alone carries its own doubled penalty rather than being folded into the main claim.

Read the statute yourself

Everything on this page traces back to Conn. Gen. Stat. § 47a-21 and the Banking Commissioner's deposit-index rate. If a deadline, deduction, or interest figure is ever disputed, the primary sources — not a summary — are what control:

• Conn. Gen. Stat. § 47a-21 — Security deposits (Cornell Law Institute) — the full statutory text covering the cap, the escrow and interest duties, the two-prong return deadline, and the penalties.
• Security deposit interest rates (Connecticut Department of Banking) — the Banking Commissioner's official page for the annual deposit-index rate you must use for the interest calculation.

FAQ

Didn't Connecticut lower the cap to one month's rent?

No. H.B. 6891 (2025) would have done that, but it died in committee on June 4, 2025. The two-month / one-month (62+) structure remains the law.

What interest rate do I pay?

The Banking Commissioner's annual rate (the deposit index) — it changes yearly, so look it up each anniversary rather than reusing last year's number.

What if the tenant was late on rent?

They forfeit interest for any month rent was delinquent more than 10 days, unless your lease imposed a late charge for that delinquency.

Do I need a separate bank account?

Yes — a dedicated escrow account. Commingling with operating funds violates § 47a-21(h), and the Banking Commissioner can demand the bank name and account number within seven days.

What if the tenant never sends a forwarding address?

The 21-day-from-termination prong still applies. Send the return and statement to the last known address and document it.

Can I just keep the deposit if damages exceed it?

Withhold the full deposit with a proper itemized statement, then pursue the excess separately. The penalty for skipping the paperwork is double the deposit — don't trade a valid claim for a certain loss.

When exactly does the return clock start?

Two clocks run, and the later finish controls: 21 days from termination of the tenancy, or 15 days from your receipt of the tenant's written forwarding address. Log both dates the day they happen — a forwarding address received after move-out can move your deadline, and your cleaning or repair schedule never does.

How do I document the escrow and interest duties?

Keep the deposit in its own escrow account from receipt to return, record the bank and account details in the deposit file, and calculate interest at the Banking Commissioner's current deposit-index rate each year, crediting or paying it on the tenancy anniversary. Keep the calculation with the lease and the move-out statement so the whole file answers any later challenge on its own.

Track Connecticut's two-prong deadline: the 21-day clock runs from termination of the tenancy — or 15 days after you receive the tenant's written forwarding address, whichever is later. The Security Deposit Disposition & Deadline Tracker keeps your deposit register, deduction ledger, and deadlines in one formula-driven tracker ($14.95, one-time purchase).

More security deposit guides

• Security deposit laws by state
• Colorado security deposit law
• Delaware security deposit law
• California security deposit law
• Florida security deposit law

Last verified: October 14, 2026. This is general information, not legal advice. Verify with a licensed Connecticut attorney before acting.