A security deposit is the money a landlord can charge before a lease begins. Security deposits serve as a form of insurance and are important because they provide a financial cushion in the event that a tenant damages the rental unit or fails to pay rent. Security deposits are common in rental leases and aligns incentives so tenants know to take care of the property.
Different locales and states have regulations governing how much a security deposit can be, where the deposit must be stored, and how to return the security deposit back to the tenant. The Nophin blog is a great resource that helps landlords and tenants know what's important about Tenant Security Deposits.
When you're ready, be sure to check out Nophin. Nophin offers property investors and landlords an ability to create dedicated security deposit accounts.