How to Avoid Paying a Utility Deposit When You Move

What utilities ask for deposits and why

A utility deposit is money you pay upfront to open an account, held by the company as insurance against unpaid bills. Not every utility requires one, and not every customer pays one — it depends on your credit history, payment history with that company, and sometimes your income.

Electric, gas, and water companies are most likely to ask for deposits. Trash collection and internet providers sometimes do, but less often. The deposit amount varies by company and region, but typically ranges from $100 to $400 for electric or gas service, though it can be higher in some areas.

The company keeps the deposit in an account while you're a customer. If you pay your bills on time for 12 to 24 months (the timeline varies by company), they return it to you — usually as a credit on your final bill or a check mailed to your address. If you stop paying, they use the deposit to cover what you owe.

Key Takeaways

• Deposits are most common when you have no payment history with a utility, a recent late payment, or a credit score below 600, but requirements vary by company and state.
• Asking the company directly about deposit requirements before you move is faster than waiting for a bill — some utilities waive deposits for customers over 65 or receiving certain benefits.
• Paying your first bill immediately and on time, then requesting a deposit waiver after 12 months of on-time payments, works for customers who were charged one initially.
• If you cannot pay a deposit, look for low-income utility programs run by your city or county — some cover deposits as part of bill payment help.
• Moving your service to a new address with the same company sometimes resets deposit requirements, so staying with your current provider can save you money.

When a utility will waive the deposit requirement

Most utilities waive deposits for customers with a strong payment history — usually 12 to 24 months of on-time payments with that company. If you're switching from one address to another with the same utility, ask whether they'll waive the deposit based on your existing account history. Many will, even if you're moving to a different service territory.

Some utilities have automatic waivers for specific groups. Customers age 65 and older, those receiving Supplemental Security Income (SSI), or those on certain state assistance programs may not pay a deposit at all. Call the utility's customer service line and ask directly — these waivers are not always advertised, and you have to request them.

A few states have rules limiting when utilities can charge deposits. California, for example, prohibits deposits for residential customers unless the company has a specific reason tied to that customer's credit or payment history. Check your state's public utilities commission website to see whether your state has similar rules.

How to find out your deposit amount before you move

Contact the utility company 2 to 3 weeks before your move-in date and ask what deposit they require for your address and service type. Have your Social Security number ready — they'll run a credit check to determine the amount. Some companies do this over the phone; others require you to start the process online.

When you call, ask three things: the deposit amount, whether any waivers apply to you, and whether you can pay the deposit in installments. Some utilities allow you to split the deposit across your first two or three bills instead of paying it all upfront. This is not automatic — you have to ask.

If the company quotes a deposit you think is unfair, ask why. If it's based on a credit check, you can dispute inaccurate information on your credit report through the three major credit bureaus (Equifax, Experian, and TransUnion). If it's based on a late payment from years ago, explain the circumstances — some companies will reconsider.

Requesting a deposit refund after you've paid on time

After 12 to 24 months of on-time payments (check your utility's specific policy), contact the company and ask for your deposit back. You do not have to wait for them to offer it — most utilities will not return it automatically. Send a written request by email or mail, or call customer service and ask them to note your account.

The company will verify your payment history. If you've paid every bill by the due date, they'll process the refund. Some utilities credit it to your account as a one-time payment toward your next bill; others mail you a check. Ask which method they use and whether you can choose.

If you have a late payment during those 12 to 24 months, the clock resets. You'll need another 12 to 24 months of on-time payments before you can request the deposit back. One missed payment can delay your refund by a full year or more.

Low-income programs that cover utility deposits

If you cannot afford a deposit, your city or county may run a program that pays it for you. These are usually part of broader utility bill assistance programs, often funded through the Low Income Home Energy Assistance Program (LIHEAP) or local community action agencies.

To find these programs, call 211 (a free helpline) or search "utility assistance [your city]" online. When you contact the program, ask whether they cover deposits as well as monthly bills. Some do; some only help with bills you already owe. Have your income information and a recent utility bill ready.

These programs move slowly — approval can take 4 to 8 weeks — so apply as soon as you know you'll need help. Tell the utility company you've applied for assistance and ask them to delay disconnection while your application is being reviewed. Many utilities have policies allowing this.

Keeping your deposit low when you have credit issues

If your credit score is below 600 or you have recent late payments, the utility will likely charge a higher deposit or require one when another company might not. You cannot change your credit history, but you can reduce the deposit amount by paying a higher upfront payment toward your first bill.

Some utilities will lower the deposit if you pay your first month's bill in full when you open the account. This shows the company you can pay, and they may reduce the deposit by 25 to 50 percent. Ask the customer service representative whether this option is available.

Another option: open the account in a different name if someone in your household has better credit and will be responsible for paying the bill. This is legal as long as that person actually lives at the address and intends to pay. The utility will run a credit check on whoever's name is on the account.

What happens to your deposit if you move or close your account

When you close your account, the utility has 30 to 60 days to return your deposit (the timeline varies by state and company). They'll deduct any unpaid balance first, then send you the rest. If you owe money, they'll use the deposit to cover it and send you an invoice for anything beyond that amount.

If you're moving to a new address and staying with the same utility company, ask whether they'll transfer your deposit to the new account instead of refunding it. This saves you from paying a new deposit. Some utilities do this automatically; others require you to request it.

If you move and the utility cannot reach you to return the deposit, it may go into an unclaimed property account held by your state. You can search for unclaimed utility deposits through your state's unclaimed property office, usually found on the state treasurer's website.

Frequently Asked Questions

Can a utility company charge a deposit if I have good credit?

Generally no, but it depends on the company's policy and your history with them. If you have no prior account with that utility, they may charge a deposit even with good credit — they're looking at whether you've paid them before, not just your credit score. If you've been a customer for years with on-time payments, they should waive it.

What if I can't pay the deposit and the utility won't waive it?

Contact your local community action agency or call 211 to find utility assistance programs. Some cover deposits as part of their help. If no program covers deposits in your area, ask the utility whether you can pay the deposit in installments across your first few bills, or whether paying your first month's bill upfront will lower the deposit amount.

Do I get interest on my utility deposit?

Most utilities do not pay interest on deposits, even if you hold the account for many years. A few states require it — check your state's public utilities commission rules. When you request your deposit back, ask whether interest has been added; if your state requires it and the company hasn't included it, you can file a complaint with the state regulator.

How long does it take to get my deposit back after I close my account?

Most utilities return deposits within 30 to 60 days of account closure. Some are faster if you request it in writing. If you haven't received it after 60 days, contact the utility and ask for the status. Provide your final address and account number so they can track it down.

Can a utility charge a deposit if I'm on a fixed income or receiving benefits?

Many utilities have waivers for customers age 65 and older or those receiving SSI, but you have to ask — they won't offer it automatically. Call the utility's customer service line and explain your situation. If they say no, ask whether your state's public utilities commission has rules about deposits for low-income customers, then file a complaint if the company is violating them.