Security Deposit Interest by State: Does Your Landlord Owe You Interest?
Many tenants don't know that some states require landlords to pay interest on security deposits. If your landlord hasn't been paying interest, you might be owed money.
Quick Answer
About 15 states plus several major cities require landlords to pay interest on security deposits. The rate typically ranges from 1-5% annually.
Scroll down to check your state's requirements.
States That Require Security Deposit Interest
| State | Requirement | Interest Rate | Notes |
|---|---|---|---|
| Connecticut | Required for all deposits | Equal to average savings deposit rate | Interest paid annually |
| Florida | Required for all deposits | 75% of annualized average interest rate OR 5% simple interest | Landlord chooses method |
| Illinois | Properties with 25+ units | Interest paid on deposits held 6+ months | Rate set annually by state |
| Iowa | Required for all deposits | Interest at rate paid by banking institution | Paid at end of tenancy |
| Maryland | Required for all deposits | 3% simple interest | Paid every 6 months or at end of lease |
| Massachusetts | Required for all deposits | 5% or actual bank rate if higher | Paid annually |
| Minnesota | Required for all deposits | 1% simple interest | For deposits over $500, held 180+ days |
| New Hampshire | Deposits held 1+ year | Interest at rate paid by bank | Paid at termination |
| New Jersey | Required for all deposits | Interest at bank rate | Must use interest-bearing account |
| New Mexico | Leases 1+ year | Annual interest paid yearly | Applies to longer leases |
| New York | Required for all deposits | Interest at prevailing rate | NYC has specific requirements |
| North Dakota | Leases 9+ months | Interest at reasonable rate | For longer-term rentals |
| Pennsylvania | Deposits held 2+ years | Interest at rate paid by bank | After 2 years only |
| Virginia | Properties with 50+ units | Interest at bank rate | Large properties only |
Cities with Their Own Requirements
Some cities have deposit interest requirements even if their state doesn't:
Los Angeles, CA
Interest at rate set annually by LAHD
San Francisco, CA
Rate set by Rent Board
Santa Monica, CA
Specific rate requirements
Chicago, IL
Rate set by city ordinance
What If Your Landlord Didn't Pay Interest?
If you're in a state that requires deposit interest and your landlord hasn't paid it, you have options:
- Request it in writing: Send a letter requesting the unpaid interest.
- Deduct from rent: Some states allow you to deduct owed interest from rent.
- Add to your claim: Include unpaid interest when suing for your deposit.
- Penalties: Some states impose penalties for failing to pay required interest.
States That Don't Require Interest
Most states do not require landlords to pay interest on security deposits. If your state isn't listed above, your landlord likely has no obligation to pay interest — but always check local city ordinances.
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