How to Record an Ontario Rent Deposit Paid by e-Transfer

When an Ontario tenant pays a last month's rent deposit by Interac e-Transfer, record it separately from ordinary monthly rent. Confirm the deposit in the bank account, link it to the tenant and unit, record the amount and Interac reference, provide a receipt when requested, track the deposit and required interest during the tenancy, and apply the deposit only to the last rent period.

The payment method does not change the deposit rules. An e-Transfer notification helps identify the payment, but it does not replace the tenancy agreement, deposit ledger, bank confirmation, or a rent receipt.

What Are the Ontario Rules for a Rent Deposit?

This article is about the rent deposit commonly called “last month's rent,” not a key deposit or another payment.

Ontario's Residential Tenancies Act and Landlord and Tenant Board guidance say:

• A landlord can require a rent deposit on or before entering into the tenancy agreement.
• The deposit cannot exceed the lesser of one rent period and one month's rent.
• The deposit must be used for the final rent period, not for damage or another purpose.
• The landlord must pay interest on the rent deposit every year at the rate set by the Act.
• A landlord must provide a receipt for rent, a rent deposit, arrears, or another amount paid when a tenant or qualifying former tenant asks, free of charge.

Those rules have details and exceptions. This workflow helps organize payment records; it does not decide whether a deposit or payment-method term is lawful. Check the current law and Landlord and Tenant Board guidance, and get legal advice for a dispute.

What Should the Rent-Deposit Ledger Include?

Use a dedicated deposit record for each tenancy. Include:

• Property and unit
• Tenant name and any co-tenants
• Name displayed on the e-Transfer, if different
• Tenancy start date
• Date the deposit was requested and received
• Amount of the deposit
• Rent period and lawful rent when the deposit was collected
• Interac reference or confirmation number, when available
• Bank deposit date and account used
• Receipt issue date and receipt number, when applicable
• Interest periods, amounts paid or credited, and dates
• Any lawful deposit top-up or refund, with its reason
• Date and rent period when the deposit was finally applied
• Notes and links to the lease, correspondence, and bank record

Do not identify a deposit only as “rent.” A specific label such as “last month's rent deposit—Unit 204” reduces the risk that it will be counted as an ordinary month or applied to the wrong tenant.

How Do You Record an e-Transfer Rent Deposit?

1. Confirm the tenancy and the amount requested

Before recording the payment, match it to the signed or proposed tenancy agreement, property, unit, tenant, and agreed rent period. Confirm that the amount requested fits the current Ontario rules.

Do not copy the amount from another unit or from an old lease. Monthly and weekly tenancies use different rent periods, and the Act limits the deposit by reference to the rent for the unit.

2. Capture the e-Transfer details

Record the payer name, amount, notification date, status, and Interac reference number. If a parent, roommate, company, or another person paid on the tenant's behalf, keep both the displayed payer and the tenant names.

Interac explains that email or text carries the transaction notification while financial institutions move the money. Open the bank or credit union through its known app or website and confirm that the funds were deposited before treating the rent deposit as received.

If the transfer is pending, cancelled, declined, expired, or disputed, preserve the status history and contact the financial institution when needed. Do not ask for a duplicate payment until you understand what happened to the first transfer.

3. Put it in the deposit ledger, not a monthly paid-rent row

Create the deposit entry as soon as the bank confirms it. Keep it separate from the rent roll that tracks what each unit owes and pays each month.

The separation prevents common errors:

• Marking the first month paid twice
• Counting the deposit as a normal rent payment before it is applied
• Losing track of which unit holds the deposit
• Using the amount against repairs, arrears, or another charge without checking the law
• Forgetting the deposit when the tenancy ends

Ask a qualified accountant how the deposit should appear in financial statements and tax records. An operational ledger should preserve what the money is for even when the accounting entry is handled elsewhere.

4. Provide a clear receipt when requested

Section 109 of the Act requires a landlord to provide a receipt free of charge when a tenant or former tenant makes a qualifying request. The Landlord and Tenant Board says this applies to a rent deposit and that a former tenant can request a receipt within 12 months after the tenancy ends.

A useful receipt identifies:

• Tenant and landlord
• Rental property and unit
• Amount received
• Date received
• Purpose: last month's rent deposit
• Payment method
• Receipt number or other internal reference

Avoid putting sensitive banking details on the receipt. Keep the Interac reference in the internal ledger unless it is needed to resolve a payment question.

An e-Transfer email is not automatically the landlord's receipt. It may show that a transaction notice was sent, but it may not identify the rental unit, state the purpose, or show how the landlord recorded the payment. The Ontario e-Transfer rent-receipt guide lists every prescribed field and explains how to match the notification before signing a receipt.

5. Track interest and changes throughout the tenancy

Do not file the deposit record away until move-out. The Landlord and Tenant Board says interest is owed on the rent deposit every year, at the same rate as the rent increase guideline under the Act. The guidance also explains that a landlord can ask for the deposit to be increased when lawful rent increases.

For each change, keep the calculation period, amount, date, and whether money was paid, credited, or used in another lawful way. Do not overwrite the original deposit amount. A dated history makes it possible to reconstruct the balance later.

Because guideline rates, exemptions, timing, and a specific tenancy's facts can matter, verify the current requirements instead of reusing last year's calculation.

6. Reconcile the deposit ledger

At least monthly, compare the deposit ledger with the bank account and tenancy records. Investigate:

• A deposit entry with no completed bank deposit
• A bank deposit with no tenant or unit match
• Two notifications recorded for one transfer
• A deposit assigned to the wrong property
• An interest payment or credit missing from the ledger
• A refunded or returned amount that did not update the balance

For a portfolio-wide monthly process, use the rent payment tracking and reconciliation guide.

7. Apply the deposit to the final rent period

When the tenancy is ending, confirm the lawful final rent period and the current deposit balance. Record when and how the deposit is applied, update the rent roll, and preserve any statement or receipt provided to the tenant.

Do not silently delete the deposit row after applying it. Keep the original receipt, interest history, final application, and remaining balance or refund in the record trail. If the tenant never receives vacant possession, the tenancy changes, or the parties dispute the application, section 107 and other parts of the Act may apply; get legal advice rather than improvising a bookkeeping fix.

Is the e-Transfer Email Enough Proof of the Deposit?

Not by itself. A complete record connects:

• Tenancy agreement: why the deposit was requested and which tenancy it belongs to
• e-Transfer notification: the payer, amount, status, and reference communicated
• Bank record: whether the funds were deposited
• Deposit ledger: how the landlord tracked the amount, interest, changes, and final use
• Receipt: the landlord's acknowledgement when one is requested

Together, these records make it easier to answer a tenant question, prepare for the end of the tenancy, support bookkeeping, or explain the history in a dispute.

How TransferLog Helps Organize Rent-Deposit Notifications

TransferLog organizes transaction details found in Interac e-Transfer notification emails from connected Gmail, Outlook, or iCloud inboxes. Landlords and property managers can filter transactions, assign a property or deposit category, and export records as CSV or PDF.

Use it for the notification side of the workflow:

1. Find the incoming rent-deposit notification.
2. Review the payer, amount, date, status, and reference.
3. Categorize it for the correct property or unit.
4. Export and match it to the deposit ledger and tenancy agreement.
5. Confirm it against the bank account.

TransferLog does not create a legally compliant rent receipt, calculate deposit interest, determine lawful rent, access the bank account, or decide how the Residential Tenancies Act applies. For longer-term document retention, see the Canadian e-Transfer record-keeping checklist.

The Ontario rules in this guide do not apply to B.C. security or pet damage deposits. For a B.C. property, use the B.C. e-Transfer deposit record workflow.

Official Sources

• Ontario Residential Tenancies Act, sections 105–109
• Landlord and Tenant Board: A Guide to the Residential Tenancies Act
• CRA Guide T4036: Rental Income
• Interac e-Transfer help

This article provides general record-keeping information, not legal, tax, or accounting advice.

Organize rent-deposit notifications with TransferLog. Start free, then reconcile the export with your tenancy and bank records.