Does Your Landlord Owe You Interest on Your Deposit?

Only in a minority of places. As of August 2026, seven states (Connecticut, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, and North Dakota) plus Washington DC require interest in a typical year-long tenancy. Seven more (Florida, Iowa, Illinois, New Mexico, New York, Ohio, and Pennsylvania) require it only in specific situations, such as large buildings, large deposits, or long tenancies. The other 36 states require none, and a few (Missouri, Washington, Wyoming, Oklahoma) affirmatively let the landlord keep any interest earned. Some cities, most notably Chicago, add their own requirement by ordinance.

Interest is owed in an ordinary tenancy in Connecticut, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, North Dakota (after nine months of occupancy), and Washington DC (after twelve months). It is owed conditionally in Illinois (buildings of 25 or more units), New York (buildings of six or more units), Ohio (only on the portion of the deposit above one month's rent), Pennsylvania (only from the third year of the tenancy), New Mexico (only on deposits above one month's rent on annual leases), Florida (only if the landlord chose an interest-bearing account or bond), and Iowa (only interest earned after the first five years). Chicago requires it citywide under the RLTO.

Almost every statutory formula is simple interest: deposit times the annual rate times the years held. For example, a $2,000 deposit held three years in Minnesota earns $2,000 x 1% x 3 = $60. States tweak the inputs: Maryland counts only full months and uses the greater of 1.5% or a Treasury-based rate, Ohio applies its 5% only to the part of the deposit above one month's rent, and Pennsylvania does not count the first two years. The calculator on this page applies the right formula for your state.

Chicago sets a new rate every year: each December the City Comptroller averages the rates paid on savings accounts, insured money market accounts, and six-month certificates of deposit at the commercial bank holding the most deposits in the city, and that average becomes the security deposit interest rate for rental agreements entered the following year (Chicago Mun. Code 5-12-081). The current figure must appear on the RLTO summary attached to your lease. Landlords must pay the interest, in cash or as a rent credit, within 30 days after the end of each 12-month rental period once the deposit has been held more than six months.

Not under state law. Neither Cal. Civ. Code 1950.5 nor Tex. Prop. Code ch. 92 requires a landlord to pay interest on a residential security deposit. California renters should still check their city: several rent-controlled cities require deposit interest by local ordinance even though the state does not. Texas has no equivalent local layer for deposit interest.

It depends on the statute. Annual payment or rent credit: Connecticut (each tenancy anniversary), Massachusetts (each anniversary, and the tenant may deduct unpaid interest from rent), New Jersey (each lease anniversary or January 31), Ohio, Pennsylvania (from year three), Illinois and Chicago (within 30 days after each 12-month period), and Florida (at least once a year). With the returned deposit: Maryland (within 45 days after the tenancy ends), Minnesota, North Dakota, New Hampshire (with a 3-year request option), and Washington DC.

Statutory rates are simple. Maryland says interest "is not compounded," Minnesota specifies "simple noncompounded interest," and Florida and Ohio use flat simple-interest percentages. In states that pass through what the account actually earned (New Jersey, New York, North Dakota, New Hampshire, DC), you receive the account's real earnings, which compound however the bank compounds them, so a simple-interest estimate is a close approximation, not the exact figure.

Sometimes. New York lets the landlord keep 1% per year as an administrative fee. Pennsylvania lets the landlord keep 1% per year starting when the escrow obligation begins. Washington DC lets the landlord keep up to 30% of any interest earned above the statement savings rate. New Jersey abolished its administrative fee in 2003, so all earnings go to the tenant. And in most of the country the landlord keeps everything, because no interest is owed at all; Missouri and Washington State say so expressly.

Start with a written demand that cites your state's statute, states the deposit amount and dates, shows the interest math, and sets a deadline. Statutes put real teeth behind it: Massachusetts allows three times the interest owed plus attorney's fees, DC allows treble interest for bad faith, Illinois can cost the landlord an amount equal to the whole deposit, and Chicago's RLTO awards two times the deposit. If the demand is ignored, small claims court handles these amounts in every state. Our demand letter generator drafts the letter free, or a licensed attorney can prepare it for a flat fee.

In two states, partly. Florida provides that no interest is due a tenant who wrongfully terminates the tenancy before the rental term ends. Connecticut makes a tenant forfeit interest for any month rent was more than ten days late, unless the lease imposed an agreed late charge instead. Most other interest states have no forfeiture rule, though deductions the landlord lawfully takes from the deposit reduce the base the interest is figured on.

In many states, yes: Georgia, Delaware, North Carolina, Oklahoma, Tennessee, Kentucky, Maine, Michigan, Alaska, and Washington all require an escrow or trust arrangement of some kind. But a separate-account requirement is not an interest requirement. In most of those states the statute is silent about the earnings, and in some (Missouri, Washington, Oklahoma, Wyoming) the law expressly keeps interest away from the tenant. Only the jurisdictions listed in the table above owe the earnings to you.