Two different things, even when they feel similar
A security deposit is generally held to cover damage beyond normal wear and tear, cleaning, and sometimes unpaid rent, and it isn't settled until after you move out. A "last month's rent" payment, when a lease actually collects one, is rent paid in advance for a specific future month, already earmarked for that one purpose. They can look identical sitting in the same bank account at move-in, but they are legally different things, and assuming one automatically covers the other without your landlord's agreement is one of the more common — and costly — mistakes tenants make on their way out.
Why you can't decide this on your own
Skipping your final month's rent because you expect the deposit to absorb it hands the decision to your landlord, not to you. If your landlord treats the missed payment as unpaid rent rather than an agreed use of the deposit, you could face late fees, a lease violation notice, or even eviction proceedings during your last weeks in the unit — the exact situation you were probably trying to avoid by skipping the payment in the first place. Some states do let a landlord apply a security deposit toward unpaid rent, including a shorted final month, but that is the landlord's option to exercise when they process the deposit after you leave, not something a tenant can force by simply not paying.
There is also a timing problem working against you. Your landlord typically does not finalize what the deposit actually covers until after you have moved out and the unit has been inspected. If you stop paying rent early and assume the deposit will make up the difference, you will not know until weeks later whether there was even anything left in the deposit to cover it, once cleaning and repair costs — real or disputed — are subtracted first.
When your lease actually collects "last month's rent" separately
Some leases collect a distinct "last month's rent" payment at move-in, on top of a security deposit — read your lease's move-in charges line by line, since a landlord might list "first month, last month, and security deposit" as three separate amounts. If your lease is written that way, that money is already designated for your final month and should be applied when the time comes; you are not "using" the deposit at all in that case, because it was never the deposit to begin with. The confusion usually starts because the labels landlords use for these payments are not consistent — what one lease calls a "deposit" another calls "advance rent," and a few leases blend the two into a single number without saying which purpose it serves.
If your move-in paperwork does not clearly separate the two, ask your landlord directly, in writing, which category each payment falls into before you assume anything about how your final month will be handled.
A concrete example
Say your lease sets rent at $1,800 a month and collected a $1,800 security deposit at move-in, with no separate "last month's rent" line anywhere in the paperwork. If you stop paying rent in your final month assuming the $1,800 deposit will cover it, and your landlord later finds $600 in legitimate cleaning and repair charges, you could end up owing that $600 out of pocket — the deposit does not stretch to cover both the unpaid rent and the damage once everything is netted against a single $1,800 balance. Worse, if your landlord treats the withheld rent as a lease violation rather than an agreed deposit application, you may be dealing with a collections notice or a mark on your rental history for something you assumed was already settled.
How the law treats deposits that double as rent
Depending on how your state and your lease define things, a single payment can sometimes function as both an advance rent payment and a security deposit — and be subject to the same cap and return rules either way. California's statute treats "security" broadly enough to include "an advance payment of rent," meaning any money collected under that label still counts toward the same overall deposit limit (Cal. Civ. Code § 1950.5). That is one state's specific approach to counting these payments toward a cap — it says nothing about whether your own state lets you apply a deposit to unpaid rent, so check your own state's law rather than assuming it works the same way everywhere.
How to protect yourself
If you want to apply your deposit toward your final month's rent, ask your landlord in writing and get their agreement back in writing too — do not assume silence means yes, and do not stop paying rent based on a verbal conversation you cannot prove happened later. Otherwise, pay your last month's rent as normal and let the deposit process play out separately after you move out, the same way it would for any other month.
Keep a copy of your move-in paperwork so you can point to exactly what each payment was labeled, and hold onto any written exchange with your landlord about how your final month will be handled. Upload your lease to Honestkey to see whether your agreement includes a last month's rent provision or otherwise treats your deposit as something you're allowed to apply to rent, so you know before your final month arrives rather than after a missed payment turns into a dispute.