Security Deposits & Accruing Interst Accounts

The landlord shall: Accrue interest at an annual rate equal to four percentage points below the Federal Reserve Board discount rate as of January 1 of each year on all property or money held as a security deposit. However, no interest shall be due and payable unless the security deposit has been held by the landlord for a period exceeding 13 months after the effective date of the rental agreement or after the effective date of any prior written or oral rental agreements with the same tenant, for continuous occupancy of the same dwelling unit, such security deposit earning interest which begins accruing from the effective date of the rental agreement, and such interest shall be paid only upon termination of the tenancy,
delivery of possession and return of the security deposit as provided in subsection A.

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1. I should go ahead and put the security deposit into an interest accruing account from the beginning of the tenancy (just in case the tenant resides in the home for more than 13 months).
2. At the end of the tenancy, assuming there are no damages, the tenant would get back the full security deposit + any interest accured on the account only if he/she has resided in the home for more than 13 months (if it's less than 13 months the landlord keeps the money).