Deposits are one of the most misunderstood parts of renting in Ontario, in both directions. Tenants hand over money they do not owe, and almost none of them collect the interest they are owed.
What can be collected
A rent deposit of no more than one rental period. In practice, last month's rent. It is applied to your final month and cannot be used for anything else.
A key deposit, refundable, and only up to the reasonable cost of replacing the keys, fobs or remotes.
What cannot
A damage deposit. A security deposit. A pet deposit. A cleaning deposit. An application fee for considering your application. A requirement that you provide post-dated cheques or sign up for automatic payment. A demand for several months of rent in advance.
You may offer to pay more up front, and some tenants do to strengthen a weak application. A landlord may not require it.
How and when you actually pay it
This trips up almost every first-time renter, and the timeline is tighter than people expect.
One business day after acceptance, most commonly. The deposit is due almost immediately once the lease is accepted, so have the funds liquid and reachable before you submit an offer rather than after.
I email you the instructions as soon as the lease is accepted, from the owner or the listing brokerage: the exact amount, who the draft is payable to, and where to take it.
Go to your bank and get a bank draft. Not a personal cheque, and not usually an e-transfer, which has daily limits well below a first-and-last deposit.
It is made payable to the listing brokerage's trust account, not to the landlord personally. A regulated account, separate from the brokerage's own money.
The draft can be taken to any branch of the listing brokerage's bank and deposited there. You do not need to travel to the brokerage's office, which surprises people and saves an afternoon.
Before you hand the draft over, photograph it. Afterwards, photograph the deposit slip and any receipt the teller gives you, and email both to me and to the listing brokerage the same day.
It takes thirty seconds and it is the only proof you have that a large sum of money left your hands and arrived where it was supposed to. On the rare occasion a deposit goes astray between a branch and a trust account, the tenant with photographs sorts it out in an afternoon and the tenant without them does not.
If somebody asks for cash, or for the draft to be made out to an individual rather than the brokerage's trust account, stop and call me. That is the shape most rental deposit fraud takes, and it is the point at which it is still preventable.
Interest on the deposit
Two different things get called "interest on the deposit", and only one of them is likely to put money in your pocket.
Interest while the brokerage holds it
Between acceptance and the start of the lease, your deposit sits in the listing brokerage's trust account. Under Ontario's real estate rules that interest belongs to you unless the agreement says otherwise, but brokerages are permitted to set a minimum threshold in their disclosure, below which no interest is paid out.
On a rental deposit sitting for a week or two, the amount earned essentially never reaches that threshold. This is worth understanding rather than chasing. It matters far more on the purchase side, where a deposit is much larger and sits for sixty or ninety days. See How Deposits Work for the buying version.
Interest your landlord owes you annually
This one is real, and it is the one worth knowing about. Once you are in the tenancy, your landlord owes you interest on the last month's rent deposit every year it is held, at the annual rent increase guideline rate. For 2026 that is 2.1 per cent, and there is no minimum threshold here.
On a $2,800 deposit that is about $59 a year. Over a four-year tenancy it is the better part of $250.
Most often the landlord applies it by topping up your deposit when the rent goes up, which is common and entirely proper. If your rent has not increased, a short friendly email once a year does it: "Could you confirm the interest owed on the last month's rent deposit for the past year, at the guideline rate?"
At the end of the tenancy
- The deposit is applied to your last month's rent. You do not pay that month separately.
- Nothing can be deducted from it for cleaning or damage. If a landlord believes you caused damage, they must apply to the Landlord and Tenant Board and prove it.
- If the property was sold during your tenancy, the deposit and the interest owed transfer to the new owner. See If Your Landlord Sells.
The guideline rate changes annually and was checked in July 2026. If a landlord is withholding a deposit or refusing interest, a community legal clinic will help at no cost.