Well interest rates for escrow accounts have been almost nothing for years. But yes. You must open an escrow account at a bank in DC. You must tell your tenants what bank you are using, and every six months what the interest rate for the previous period was. Just remember that the security deposit is the tenant’s money, not the landlord’s

For a small landlord, or for any individual tenants, it’s a small amount of money (my last security deposit in DC was $500 (I lived there for 13 years so it’s been a while) even over that time at .25% it’s not much. But imagine being bozzutto, and having $2000 from each of 5000 tenants. The temptation to use that $10m for an investment must be high.