The rental deposit is a particularly important issue for tenants, as it often represents a major financial burden – especially when moving out and into a new home, as in this case two deposits are tied up for a certain period of time. Many people ask themselves: do I have to deposit the full amount immediately? What happens to my money during the rental period? When and under what conditions will I get the deposit back? We have compiled the most important information for you.
The traditional form of security deposit is the so-called deposit custody account. The deposit is deposited in a special bank account in the name of the landlord. This money remains blocked for the entire rental period and is not freely available to the tenant.
The traditional custody account has some disadvantages:
Good to know: the landlord must have released or claimed the deposit no later than 12 months after the end of the tenancy agreement.
Because of these disadvantages, many tenants are looking for more flexible and uncomplicated alternatives to the traditional deposit.
With Zurich security deposit insurance, you don't have to block the deposit amount in a bank account. Instead, you simply pay an annual premium. In the event of a claim, Zurich will pay the landlord – either if both parties agree or if a legally valid decision has been made. However, Zurich will reclaim the amount paid out from you.
Your advantages over the traditional custody account:
Security deposit insurance gives you more financial leeway and is very straightforward.
There are two ways to arrange your security deposit: the traditional custody account or security deposit insurance. Both options have advantages and disadvantages. We show you the differences:
| Criterion |
Security deposit custody account | Security deposit insurance from Zurich |
| Liquidity | Money not available, but tied up. |
Money remains available. You pay an annual premium. |
| Conclusion |
Bank account required | Bank account not necessary. Conclusion online and with immediate confirmation. |
| Costs |
High one-time payment, no ongoing fees, one-off opening costs |
No one-time payment, annual premium |
| Repayment | Repayment after the end of the rental period (may be delayed in the event of disputes) | None, as no money is deposited. Payments to the landlord will be reclaimed by Zurich from the tenant. |
| Legal protection | No review by third parties, disputes often have to be resolved by the parties themselves | Passive legal protection: Claims are checked before payment |
| Security for landlords |
Landlord can access the deposit directly in the event of justified claims |
Landlord receives a guarantee, claims are checked |
| Available for tenants | No. The money is tied up until you move out. |
Yes. The money remains available during the rental period. |
| Processing | Account opening and repayment often long-winded |
Completely digital and uncomplicated |
| Suitable for |
Anyone with sufficient savings and little need for flexibility | Anyone who wants flexibility and a digital solution |
If you want to use your money flexibly and prefer simple processing, security deposit insurance is usually the better choice. If you have sufficient savings and do not want any ongoing costs, the traditional security deposit custody account is recommended – especially for longer rental periods.
Many tenants ask themselves how repayment of the security deposit works, and what applies in the event of a claim. A common mistake: landlords can simply keep the deposit. In fact, it may only be used for justified claims – such as outstanding rent or damages. Important: claims must be asserted no later than one year after moving out.
After moving out, the deposit will be returned as soon as all claims have been settled and the tenancy has ended. In the case of a traditional deposit custody account, payment may be delayed, for example if utility bills are still outstanding or there are discrepancies.
In addition, security deposit insurance offers financial flexibility and support in the event of a claim. So you can relax and concentrate on your new home – we'll take care of the rest.
According to Swiss law, the security deposit may not exceed three months' rent including ancillary costs (see Art. 257e CO). The money must be deposited in a blocked account or custody account at a bank and must be in the name of the tenant. The interest that accrues on the security deposit account also belongs to the tenant.
You should always refuse cash payments or transfers to the landlord's private account. Only the blocked account guarantees transparency and security for both sides.
The security deposit is usually due before moving in and immediately after signing the contract. If you do not pay the deposit on time, the landlord can refuse to hand over the apartment or take legal action. It is therefore essential that you adhere to the payment deadline.
If you cannot raise the security deposit immediately, there is a simple alternative: with Zurich security deposit insurance, you only pay one annual premium. Zurich takes over the guarantee for your deposit. This keeps your money available – e.g. for your move or new furniture. You can simply take out the insurance online.
If the landlord does not place your deposit in a blocked account, but in his private account for example, you should ask him in writing to do this correctly (preferably by registered letter). If the landlord does not respond, you can offset the deposit against the next rent payments – seek legal advice beforehand.
You should always refuse cash payments or transfers to private accounts. Only a blocked account protects your claims and ensures transparency.
Yes, interest must be paid on your security deposit in a blocked bank account. The interest belongs to you and is credited to your security deposit account every year. When the deposit is repaid, you will also receive the accumulated interest.
If you don't want to block your money in an account, there is an alternative: with Zurich security deposit insurance, you only pay one annual premium. Your money remains available, Zurich takes over the guarantee for your deposit – ideal for moving or new furniture. It can be taken out conveniently online.
Yes, you must declare the security deposit in your tax return. The security deposit custody account counts as one of your assets, and the interest is considered income. You must declare both amounts accordingly.
The security deposit will be repaid as soon as you have moved out and all outstanding claims have been settled. As a rule, payment is made promptly, but at the latest after one year – provided the landlord has not taken any legal action (e.g. debt collection or arbitration proceedings).
The landlord may only deduct justified claims such as damage to the apartment, outstanding rent or outstanding ancillary costs from your deposit. These deductions must be clearly traceable and supported by an invoice or receipts.
One advantage of security deposit insurance: Zurich legally checks all claims made by the landlord and only pays if they are justified – unless you have already accepted the claim.
The deposit must be repaid after you move out, as soon as all claims have been settled. After one year at the latest, you can request the deposit directly from the bank – provided the landlord has not taken any legal action.
Request the repayment in writing, preferably by registered letter. If the landlord does not respond, you can request the deposit directly from the bank after one year or take legal action – e.g. via the conciliation office. Legal advice is recommended if you are unsure.
One year after the end of the tenancy, you can request the deposit directly from the bank – even without the landlord's consent, as long as no legal steps such as debt collection or arbitration proceedings have been initiated.
An informal letter or the bank form, together with the statement of account and the confirmation of termination, is sufficient for reclaiming from the bank.
First try to find a solution together with the landlord and record all outstanding points in writing. If this does not work, contact the cantonal conciliation office or initiate debt collection proceedings. In complicated cases, legal proceedings may also be necessary.
Personal legal protection insurance can support you in such situations and provide you with legal advice.
The annual premium depends on the amount of your security deposit. You pay the premium for as long as Zurich guarantees your deposit.
Yes, a change is possible – provided that both you and the landlord agree. The security deposit insurance ends when the original certificate or proof of guarantee from Zurich or a replacement guarantee is returned.
If you and your landlord agree on a claim or a legally valid decision has been made, Zurich will pay the amount directly to the landlord. Zurich will then claim the money paid out back from you.
You can cancel the insurance when your tenancy ends and all claims have been settled. To do this, simply send Zurich back the acceptance protocol, a confirmation of termination from the landlord or the original certificate. Please note: The landlord has up to one year after the end of the tenancy to file claims.
