While surety bonds and security deposits accomplish the same thing, they function very differently. A security deposit requires you to give your landlord a set amount of money, often as much as two months rent, before you can rent an apartment.

This money guarantees the landlord that he or she will not have to pay for any damage you cause or rent you fail to pay. A surety bond only requires you to put up a fraction of that amount when you sign the lease to guarantee the apartment.

However, there are three important differences.

1. The fee, ranging from a minimum bond of $87.50 to 17.5 percent of the going security deposit, for a surety bond is non-refundable, and is kept by the company issuing the bond – not the landlord. With a security deposit, when you move out you may receive a refund, after the landlord deducts expenses incurred to get your apartment ready for the next resident.

2. A surety bond offers coverage for a fixed period, typically 5 years. A security deposit is typically good for the life of the lease. If you’re looking for a larger apartment in the same building, both options will generally remain in effect, and you only owe an amount proportional to the increase in rent.

3. Last, and perhaps most important, is that you will still be financially liable for any damages to the apartment. However, instead of paying the landlord for damages, you will pay the company issuing the surety bond.