Security Deposit Interest Calculator
Calculate interest owed on a security deposit based on amount held, dates, and your local interest rate.
| State | Interest Requirement | Notes |
|---|---|---|
| California | No statewide requirement | Some cities (e.g., Los Angeles) may have local rules |
| New York | Required for buildings 6+ units | Rate set by the bank holding the deposit; must be held in interest-bearing account |
| New Jersey | Required | Rate varies — must be held in an interest-bearing account; landlord may keep 1% admin fee |
| Massachusetts | 5% per year (or bank rate) | Must pay tenant the higher of 5% or actual bank rate annually |
| Connecticut | Required | Rate tied to savings account rate at the holding bank |
| Illinois | Required in certain municipalities | Chicago requires interest based on City Comptroller rate; statewide no universal rule |
| Ohio | No requirement | No statewide rule requiring interest on security deposits |
| Florida | Required if deposited in interest-bearing account | Landlord may choose interest-bearing (pay tenant) or surety bond (no interest) |
This table is for general reference only and may not reflect current law. Verify with your state's landlord-tenant statutes or a local attorney.
Security Deposit Interest Laws
How Simple Interest Is Calculated
This calculator uses simple interest: Interest = Deposit × Rate × (Days / 365). Simple interest does not compound — it is calculated on the original deposit amount only. Some jurisdictions use slightly different formulas (e.g., monthly compounding or different day-count conventions).
When Must Interest Be Paid?
In states that require interest, landlords typically must pay it at the end of the tenancy when returning the deposit. Some states (like Massachusetts) require annual payment of accrued interest or a credit to the tenant each year.
Penalties for Non-Compliance
Failing to pay required interest — or failing to return a deposit within the required timeframe — can result in the tenant being owed 2–3 times the deposit amount in damages, plus attorney's fees. These penalties vary by state and are strictly enforced in many jurisdictions.
Itemized Deductions
Landlords can generally deduct from the deposit for unpaid rent, cleaning beyond normal wear and tear, and damage caused by the tenant. Normal wear and tear — minor scuffs, small nail holes, carpet wear — cannot be deducted. Provide an itemized statement of deductions within the required deadline (often 14–30 days after move-out).
Best Practices
Hold the deposit in a separate, clearly labeled bank account. Track the deposit date and amount precisely. Document the property condition at move-in and move-out with photos and a signed checklist. Return the deposit (with interest if required) within your state's deadline, even if you have deductions to make.