US Security Deposit Interest Calculator by State
Compute exact statutory security deposit interest owed to tenants across all 25 major US jurisdictions. Includes statutory percentage rates, bank escrow yield rules, and allowable landlord administrative fees.
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Under Code of Ala. § 35-9A-201, landlords in Alabama are not statutorily required to pay interest on security deposits unless expressly promised in the written lease.
State-by-State Security Deposit Interest & Escrow Rules
Review interest obligations, qualifying tenancy duration, and governing statutes for all supported jurisdictions.
| State | Interest Required? | Statutory Rate Standard | Minimum Tenancy | Governing Statute |
|---|---|---|---|---|
| Alabama | No (per lease) | None required by statute | N/A | Code of Ala. § 35-9A-201 |
| Arizona | No (per lease) | None required by statute | N/A | A.R.S. § 33-1321 |
| California | No (per lease) | None required by statute | N/A | Cal. Civ. Code § 1950.5 |
| Colorado | No (per lease) | None required by statute | N/A | C.R.S. § 38-12-103 |
| Florida | No (per lease) | None required by statute | N/A | Fla. Stat. § 83.49 |
| Georgia | No (per lease) | None required by statute | N/A | O.C.G.A. § 44-7-31 |
| Illinois | Mandatory | 1% / yr (variable treasury or state rate) | 6 months | 765 ILCS 715/1 |
| Indiana | No (per lease) | None required by statute | N/A | Ind. Code § 32-31-3 |
| Louisiana | No (per lease) | None required by statute | N/A | La. R.S. 9:3251 |
| Maryland | Mandatory | 1.5% / yr (variable treasury or state rate) | 6 months | Md. Code, Real Prop. § 8-203(e) |
| Massachusetts | Mandatory | 5% / yr (mandatory statutory rate) | 12 months | M.G.L. c. 186 § 15B(3)(b) |
| Michigan | No (per lease) | None required by statute | N/A | MCL 554.604 |
| Minnesota | Mandatory | 1% / yr (mandatory statutory rate) | 1 months | Minn. Stat. § 504B.178, Subd. 2 |
| Missouri | No (per lease) | None required by statute | N/A | Mo. Rev. Stat. § 535.300 |
| New Jersey | Mandatory | 2% / yr (actual bank yield less admin) | 12 months | N.J.S.A. 46:8-19 |
| New York | Mandatory | 2.5% / yr (actual bank yield less admin) | 12 months | N.Y. Gen. Oblig. Law § 7-103 |
| North Carolina | No (per lease) | None required by statute | N/A | N.C. Gen. Stat. § 42-50 |
| Ohio | Mandatory | 5% / yr (mandatory statutory rate) | 6 months | R.C. 5321.16(A) |
| Pennsylvania | Mandatory | 2% / yr (actual bank yield less admin) | 24 months | 68 P.S. § 250.511b |
| South Carolina | No (per lease) | None required by statute | N/A | S.C. Code Ann. § 27-40-410 |
| Tennessee | No (per lease) | None required by statute | N/A | Tenn. Code Ann. § 66-28-301 |
| Texas | No (per lease) | None required by statute | N/A | Tex. Prop. Code § 92.103 |
| Virginia | No (per lease) | None required by statute | N/A | Va. Code Ann. § 55.1-1226 |
| Washington | No (per lease) | None required by statute | N/A | RCW 59.18.270 |
| Wisconsin | No (per lease) | None required by statute | N/A | Wis. Stat. § 704.28 |
How Security Deposit Interest Works Under US Landlord-Tenant Law
In United States residential leasing, security deposit funds remain the legal property of the tenant throughout the tenancy. The landlord holds the deposit merely in a fiduciary trust capacity. While certain states require landlords to maintain deposits in interest-bearing escrow accounts and remit accrued yields to tenants, other states leave deposit interest strictly to the discretion of private contractual negotiation.
Fixed Statutory Rates
Massachusetts sets a 5% statutory benchmark under M.G.L. c. 186 § 15B, and Minnesota enforces a simple 1% annual interest rate under Minn. Stat. § 504B.178.
Escrow Yield Less Admin
New York (6+ unit buildings) and New Jersey require deposits to be kept in interest-bearing bank accounts, allowing landlords to retain 1% per year for administrative handling.
States Without Interest Mandates
Major states including California, Texas, Florida, and Georgia do not statutorily require interest on security deposits unless expressly promised in the lease.
Frequently Asked Questions: Security Deposit Interest
Are landlords in the United States legally required to pay interest on security deposits?
Only in certain states and municipalities. States such as Massachusetts (5% statutory rate), Minnesota (1% simple interest), New Jersey (bank rate less 1% admin fee), New York (buildings with 6+ units), Maryland, and Illinois / Chicago enforce strict statutory interest mandates. Most other states (including California, Texas, and Florida) do not require interest unless promised in the lease.
How do landlords calculate security deposit interest in New York and New Jersey?
In New York (for buildings with 6+ units) and New Jersey, landlords must place deposits in an interest-bearing escrow account. The landlord is permitted to retain 1% of the deposit per year to cover administrative expenses, and must pay or credit the remaining accrued interest to the tenant annually.
What is the penalty if a Massachusetts landlord fails to pay deposit interest?
Under Massachusetts General Laws c. 186 § 15B(3)(b), if a landlord fails to pay the annual 5% interest (or actual bank rate) within 30 days of the end of each tenancy year, the tenant has the immediate legal right to deduct the full accrued interest from their next monthly rent payment.
Does a landlord have to pay interest on a lease shorter than one year?
Statutory interest accrual depends on state law. In Massachusetts and New York, tenancies under 12 months typically do not accrue annual interest. In Maryland, interest accrues at 6-month intervals on deposits of $50 or more. In Minnesota, simple interest accrues from the first month of tenancy.