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> However there are also co-operatives that invest your deposit and actually pass on the interest to you when you move out (these apartments are rare though).

This is not optional. It is required by law. Interest from deposits belong to the renter.

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Sure, but the difference is that they actually invest it. Normally the money pretty much just sits there.

Given the size of the deposits, and the ROIs of available low-risk investments, does the difference really matter?

Skip a single CappuFrappeGingerPumpkinLatte (or what people buy in cafes in SF) and you just got more money than any investment on the deposit can ever make.

Depends on the size I guess, but generally that feeling of "oh, look, my money did some work for me" leaves tenants with some happy thoughts on moving out.

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