Utility Bill Deposits
Utility bill deposits will tie up money that can be used for other things. Avoid paying deposits whenever possible. Deposits are charged for the following reasons:
- Initial service
- Repeated late payments
- Reconnection
Initial service deposit: This deposit may be a set amount or based on a credit check. Utility companies will pay you the little interest that is earned from them holding your money. Having good credit will reduce/eliminate the amount of a deposit required. If you do pay a deposit, find out the following:
- How long the deposit is held (number of months)
- The requirements to have the deposit returned (how many consecutive on time payments)
- How deposit is returned (credit on account or check)
- Interest percentage earned and when it is paid
Do your best to get the utility deposit back as quickly as possible. Even when you don’t earn your deposit back, you are entitled to the interest on a regularly scheduled basis.
Repeated late payments: Some utility companies charge additional deposits for consecutive late payments. Find out your utility company’s policy on that and avoid additional deposits. The additional deposits will be returned to you at different dates than initial and previously charged deposits. Find out the details so you can get the utility deposit back as quickly as possible.
Reconnection deposit: Some utility companies not only charge a non-refundable fee for reconnection but an additional deposit. Find out the policy for your utility company. It may be worth the extra effort needed to avoid turn off.
Check into community help that may be available to assist with paying utility bills. There is often additional help available to pay your utility bill once you receive a utility turn-off notice. Often the help is only offered one time per person or one time per year. Make sure you have no other options available to you before you use this resource.
Utility companies often have special programs for low income homes. Check on the guidelines, you might be surprised at the income requirements. Many people, who don’t realize it, are close enough to the poverty level to qualify for a reduced rate that will reduce utility bills.