Chicago security deposit rules

Where the money is held

A landlord must give the tenant a receipt for a security deposit (an electronic receipt is allowed if paid electronically).

“A landlord must give a tenant a receipt for a security deposit; however, if the security deposit is paid electronically, the landlord has the option to give an electronic receipt.”
Chicago Mun. Code § 5-12-080 (City of Chicago RLTO Summary)

Deposits must be held in a federally insured interest-bearing account at an Illinois financial institution and not commingled with the landlord's assets.

“A landlord must hold all security deposits in a federally insured interest-bearing account in a financial institution located in Illinois. Security deposits and interest thereon shall not be commingled with the assets of the landlord.”
Chicago Mun. Code § 5-12-080 (City of Chicago RLTO Summary)

Within 14 days of receiving the deposit, the landlord must disclose in writing (lease or other writing) which financial institution holds it.

“The landlord must provide via a written rental agreement or in other writing within 14 days of receipt of the security deposit detailing which financial institution the security deposit will be deposited.”
Chicago Mun. Code § 5-12-080 (City of Chicago RLTO Summary)

Interest

Landlords must pay interest each year on deposits and prepaid rent held more than six months, in cash or as a rent credit, at the rate set annually by the City Comptroller.

“A landlord must pay interest each year on security deposits and prepaid rent held more than six months by either cash or credit to be applied to rent due. The rate of interest a landlord must pay is set each year by the City Comptroller.”
Chicago Mun. Code §§ 5-12-080, 5-12-081 (City of Chicago RLTO Summary)

Each December the City Comptroller reviews rates, and on the first business day of each year announces the savings, insured money market and 6-month CD rates at the commercial bank with the most branches in the city, which set the deposit interest rate.

“On the first business day of each year, the city comptroller shall announce the rates of interest, as of the last business day of the prior month, on savings accounts, insured money market accounts and six (6) month certificates of deposit at the commercial bank having the most number of branches located within the city.”
Chicago Mun. Code §§ 5-12-081, 5-12-082

The Chicago security deposit interest rate for January 1 through December 31, 2026 is 0.01%.

“the rate of interest on security deposits under rental agreements governed for the period from January 1, 2026 through December 31, 2026 shall be: 0.01% This rate is based upon the average of the rates of interest, as of December 31, 2025”
City of Chicago DOH notice under Chicago Mun. Code §§ 5-12-081, 5-12-082

Getting it back

Before deducting damages, the landlord must give an itemized statement of damages within 30 days after the tenant vacates, with estimated or actual repair costs and copies of paid receipts.

“Before expenses for damages can be deducted from the security deposit, the landlord must provide the tenant with an itemized statement of the damages within 30 days of the date the tenant vacates and an estimated or actual cost for repairing or replacing damaged items, attaching copies of the paid receipts for the repair or replacement.”
Chicago Mun. Code § 5-12-080 (City of Chicago RLTO Summary)

The landlord must return the deposit and required interest, less unpaid rent and damages, within 45 days after the tenant vacates.

“A landlord must return all security deposits and required interest, if any, minus unpaid rent and expenses for damages, within 45 days from the date the tenant vacates the unit.”
Chicago Mun. Code § 5-12-080 (City of Chicago RLTO Summary)

After a fire, the landlord must return the deposit and interest (less unpaid rent and damages) within seven days of the tenant's notice terminating the rental agreement.

“In the event of a fire, a landlord must return all security deposit and required interest, if any, minus unpaid rent and expenses for damages, within seven days from the date that the tenant provides notice of termination of the rental agreement.”
Chicago Mun. Code § 5-12-110(g)

If the landlord breaks the rules

Subject to a landlord's right to correct a deficient interest payment, a landlord who fails to comply with specified deposit requirements owes the tenant damages of two times the security deposit plus interest.

“Subject to correcting a deficient amount of interest paid to a tenant on a security deposit, if a landlord fails to comply with specified security deposit requirements the tenant shall be awarded damages in an amount equal to two times the security deposit plus interest.”
Chicago Mun. Code § 5-12-080 (City of Chicago RLTO Summary)

The Illinois rule underneath

The full state rule, with the statute quoted: Illinois security deposit law. Where the city rule is stricter, the stricter rule applies to a unit in Chicago.

What to do

1. Keep your lease, the deposit receipt and any move-in checklist — several of these rules depend on them.
2. Photograph the unit when you move in and when you move out.
3. Give your landlord a forwarding address in writing when you leave.
4. If the deadline passes, send a written demand citing the rule above before going to small claims court.