This money is the tenants, not the landlords. Therefore, if the landlord gets interest on this money, its the tenants. So, landlords should not commingle this money and instead should use a separate account if they want to put it in a bank. In fact, there are specific laws about this in the General Obligations Law and a landlord is sometimes required to get interest for the tenant. From a landlords perspective, safe is better than sorry. Know the law and follow it.