Is the tenant or landlord entitled to the interest accrued on the savings account?

The interest rate allowance 2026

According to Swiss law, only the tenant is entitled to all interest accrued on a rental deposit savings account. According to Art. 257e (1) of the Code of Obligations (OR), the deposit must be deposited with a bank in a special savings account, which must necessarily be in the name of the tenant. Since the tenant remains the legal account holder, he also owns all resulting income. The landlord only has security rights, but no claim to interest as income.

The legal basis and the principle of ownership

The legal basis for answering this question is found in the core of Swiss real estate law, Article 257e of the Code of Obligations. This provision clearly requires that a landlord who requires security in money must deposit it with a bank in a savings account or in a custody account. The decisive course is set by the legal obligation to open this account in the name of the tenant. This naming ensures that ownership of the capital is never transferred to the landlord.

Since the account does not legally belong to the owner of the property, all interest credits flow directly into the tenant's assets. In daily practice in 2026, this means that the bank credits the interest annually to the deposit account and the tenant is entitled to the payment of the original capital, including all interest, upon subsequent termination of the rental agreement. The landlord only acts as a trustee manager of the security, without being entitled to the fruits of the capital.

The economic significance in the new interest rate environment

After a long dry spell in which deposit accounts barely yielded any income, the return to a positive interest rate environment has massively increased the importance of this issue. Even though the interest rates on rental deposit savings accounts are traditionally slightly lower than on freely available savings investments, the amount adds up noticeably over a long rental period. With a high rental deposit, which includes, for example, three months' rent in a coveted urban district, the interest income can reach a noticeable amount over a decade.

This increase serves the tenant as a small compensation for the lack of liquidity, as he is unable to dispose of his money during the entire rental period. The landlord or the commissioned property management company may under no circumstances withhold this interest income as compensation for account management costs. A corresponding contract clause, which would award interest to the landlord, would be absolutely void under Swiss law and would never stand up to legal review by the conciliation authority.

Tax treatment and withholding tax liability

Since the interest is legally assigned to the tenant, this logically results in tax consequences that every account holder should be aware of. In the annual tax return, the tenant must declare the deposit account as part of his net worth, as he is the beneficial owner. The income is regarded as income from movable capital assets and must be taxed accordingly. In 2026, Swiss banks withhold the statutory withholding tax of 35% on interest income, provided that the amount exceeds a certain allowance.

This amount is paid by the bank directly to the Federal Tax Administration, but the tenant can cancel this deduction. With the correct declaration in the securities register, the tenant can reclaim the withheld tax as part of his ordinary assessment. The landlord is not involved in this tax process at any time, as he acts neither as account holder nor as recipient of interest. It is therefore advisable for tenant to carefully archive the bank's annual interest statements for their documents.

Power of control and the function of the blocked account

A common misconception is that tenant believe that they can freely dispose of the annual interest during the current rental period. However, this shows the restrictive nature of the blocked account, which serves as overall security. Since both the start-up capital and the additional interest act as a pledge for the landlord, the account is blocked for both sides. Almost no Swiss bank is able to pay interest in part without the express consent of the landlord in 2026.

The interest rates therefore remain functionally linked to the capital and continuously increase the security substrate that the landlord could access in the event of a claim. Only when the rental agreement comes to an end and the transfer of the apartment has been recorded without defects will the entire sum be released. At that moment, the bank pays the balance, including all interest, to the tenant. However, if the landlord has legitimate claims, these are offset against the entire account balance, using interest first and only then the capital.

Bank charges and account management costs

In a market environment such as in 2026, many financial institutions charge fees for opening or maintaining a rental deposit account. This is the downside of interest eligibility, as the question is who has to pay for these administrative costs. Legal practice usually provides that the one-time opening fees are borne by the tenant, as he is legally obliged to provide security. However, the situation is more complex when it comes to ongoing charges.

Should bank charges exceed interest income, which can happen with very low balances, this will in fact result in a reduction in the original deposit amount. In such cases, many tenant associations argue that the tenant must not be placed in a worse position than if he had deposited the money in cash. In practice, however, account maintenance fees are often deducted directly from interest income. For good tenant due diligence, it is therefore advisable to pay attention to which financial institution the landlord wants to open the account with when concluding the contract in order to avoid unnecessarily high fees.

Consequences of incorrect account management by the landlord

Although the legal obligation to open a blocked account in the name of the tenant is clearly defined, it happens occasionally that landlord manage the money privately. In such a case, the landlord commits a serious breach of duty and may even be liable for compensation. In this situation, the tenant has the right to demand immediate transfer to a blocked deposit account and can also claim lost interest profit.

If the landlord has withheld the money unlawfully, he owes the tenant interest in the amount that would have accrued in a standard rental deposit savings account. Swiss tenancy law consistently protects the tenant in order to ensure that the fruits of the capital end up with him even if the landlord has disregarded the formal requirements. However, in a professional environment, as required on portals such as heyloft.ch, correct filing is the absolute standard that ensures the financial integrity of both parties.

Conclusion: Transparency and legal certainty in the rental portfolio

Who is entitled to the interest on the rental deposit? The answer is unequivocal in 2026: The interest belongs to the tenant, as he is the legal owner of the account. The landlord only benefits from the additional security that the accumulated interest offers, but must not enrich himself from it. A clear separation between the security deposit and ownership of interest income is the basis for a fair and trusting rental relationship.

In summary, it can be stated that knowledge of interest eligibility protects tenant from being disadvantaged when settling out after moving out. Anyone who checks their interest statements annually and is familiar with the provisions of the Code of Obligations ensures a smooth process when the deposit is returned at a later date. In a dynamic real estate market, energy and legal care is the key to success — and the correct handling of the rental deposit is an essential part of this professionalism.

glossary

• Art. 257e OR: Central legal provision in the Code of Obligations, which regulates the filing and protection of rental deposits.
• Withholding tax: A withholding tax of 35% levied by the federal government on interest income, which the tenant can reclaim in the tax return.
• Blocked account: A special bank account that is in the tenant's name and can only be closed with mutual consent.
• Interest statement: An annual document from the bank showing the current account balance and gross interest accrued in the calendar year.
• Tenant due diligence: The independent review and documentation of all relevant financial and legal aspects of a rental agreement.