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Security Deposit Interest Calculator

Calculate interest owed on security deposits for states that require it. Several states mandate landlords pay interest on held security deposits—enter deposit amount, state, and hold dates to see what's owed at move-out.

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Select the state where the property is located
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Enter the applicable rate for your state (required for states with variable rates)
Date when tenant moved in and deposit was received
Date when tenant is moving out and deposit is being returned

Security Deposit Interest Requirements by State

Which States Require Interest?

The following states require landlords to pay interest on security deposits held during the tenancy. Requirements vary significantly by state, including different interest rates, compounding methods, and holding period thresholds.

State-by-State Requirements

  • Connecticut (CT): Interest required at the average savings rate in Connecticut banks.
  • Illinois (IL): Interest required only if deposit held more than 6 months; rate varies by the interest rate earned on the landlord's account.
  • Iowa (IA): 5% simple annual interest on all deposits.
  • Maryland (MD): 3% simple annual interest, or the actual rate earned by the landlord (whichever is less).
  • Massachusetts (MA): 5% annual interest or the actual bank rate, whichever is received by the landlord.
  • Minnesota (MN): 1% simple annual interest on deposits held beyond a threshold period.
  • New Hampshire (NH): Interest rate from the bank where the deposit is held.
  • New Jersey (NJ): Rate from the bank where deposit is held; minimum 3.3% if held more than 30 days in some municipalities.
  • New Mexico (NM): Passbook interest rate from the deposit institution.
  • New York (NY): Prevailing rate for bank deposits (requirements vary by building size).
  • North Dakota (ND): 5% simple interest if deposit held more than 9 months.
  • Ohio (OH): 5% annual interest if no damages are claimed against the deposit.
  • Pennsylvania (PA): Rate from a regulated financial institution (applies to buildings with 25 or more units).
  • Virginia (VA): Interest rate as specified in the lease agreement (typically applies to longer-term leases).

Important Notes

  • Minimum Hold Periods: Some states only require interest if the deposit is held for a certain period (e.g., Illinois: 6 months, North Dakota: 9 months).
  • Building Size Requirements: Some states only require interest for larger buildings (e.g., Pennsylvania: 25+ units, New York: varies by local law).
  • Payment Timing: States have different requirements for when interest must be paid (e.g., annually, at lease termination, or credited to rent).
  • Account Requirements: Most states require deposits to be held in a federally-insured interest-bearing account separate from the landlord's personal funds.
  • Written Notice: Many states require landlords to provide tenants with written notice of the bank name, account number, and interest rate.

Best Practices

  • Separate Account: Always hold security deposits in a separate, interest-bearing account.
  • Track Dates: Keep precise records of when deposits are received and returned.
  • Annual Statements: Provide annual statements showing interest accrued, even if not required.
  • Lease Disclosure: Include bank and interest rate information in the lease agreement.
  • Timely Payment: Pay interest owed promptly when returning the deposit at move-out.
  • Local Ordinances: Check city and county laws, which may impose additional requirements beyond state law.
Disclaimer: This calculator is for informational purposes only and does not constitute legal advice. Security deposit interest laws vary by state and locality, and are subject to change. Interest rates may be variable and depend on the specific bank account used. Some states have minimum holding periods, building size requirements, or other conditions that may affect whether interest is owed. Always consult with a qualified attorney or property management professional to ensure compliance with current laws and regulations in your jurisdiction.