Two-month cap, insured account
An Iowa landlord may not demand a deposit of more than two months' rent. It must hold the deposit in a federally insured bank, savings and loan association or credit union and may not commingle it with its own property. Interest earned during the first five years of a tenancy belongs to the landlord (§ 562A.12).
Three reasons to withhold
The landlord may withhold only what is reasonably necessary to:
- remedy your default in paying rent or other funds due under the rental agreement;
- restore the unit to its condition at the start of the tenancy, apart from ordinary wear and tear;
- recover expenses of acquiring possession from a tenant who, in bad faith, fails to surrender and vacate after noncompliance and notice.
In any dispute, the landlord bears the burden of proving the reasons for withholding.
30 days after your address
Within 30 days after the tenancy ends and the landlord receives your mailing address or delivery instructions, the landlord must return the deposit or give you a written statement of the specific reasons for keeping any part. If you do not provide an address within one year after the tenancy ends, the deposit reverts to the landlord. When the property changes hands, the new owner takes over the deposit duties. If you do not object within 20 days after written notice of the amount being transferred, the new owner's obligation is limited to that amount.
Our calculator counts 30 days.
Steps to recover an Iowa deposit
- Check that the deposit did not exceed two months' rent.
- Send your mailing address in writing.
- Count 30 days.
- Demand the deposit in writing, citing § 562A.12.
- If that fails, file a claim in small claims court.
Neighboring states
Minnesota requires interest and gives 3 weeks. Wisconsin gives 21 days, Missouri caps deposits at two months with 30 days, and Illinois has its own rules.
Frequently asked questions
What is the maximum security deposit in Iowa?
Two months' rent (Iowa Code § 562A.12).
How long does an Iowa landlord have to return a deposit?
30 days after the tenancy ends and the landlord receives your mailing address.
What happens if an Iowa landlord misses the deadline?
It forfeits the right to withhold any part of the deposit.
What is the penalty for bad faith in Iowa?
Actual damages plus punitive damages of up to twice the monthly rent, and possibly attorney fees.
Sources
Last reviewed Oct 17, 2026. Read how we verify. Found an error? Tell us.