Are they doing all the other stuff by the book, like storing it in an interest bearing account at a bank they tell you? Do you get the interest either yearly by check or a report on the amount? Many to most don't, bringing up these as questions may show you know your legal rights better than they think.

They can ask, but it's a bit weird to "top off" your deposit every year when they raise the rent. I've never once had that happen across many years of renting, big & small outfits.