Security Deposit Interest Calculator
Some states and cities require landlords to pay interest on held security deposits. Enter the deposit, rate, and dates to estimate the interest owed at move-out, then check the rules below for your area.
Required rates and methods vary by state and city (Chicago, NYC, NJ, and others set specific rules). Use your jurisdiction's published rate.
Enter the deposit, rate, and dates to calculate interest.
How to use the calculator
- Enter the deposit you are holding, not the monthly rent.
- Enter the annual rate as a percentage. Use the rate your state or city publishes, or the rate your rule says to pass through. The calculator has no rate of its own.
- Enter the day the tenant paid the deposit (or the lease started) and the move-out date.
- Leave the method on simple interest unless your rule or lease says compounded.
You get the interest owed, the length of the tenancy in years, and the deposit plus interest. If you need the deposit itself back to the tenant, the security deposit guide covers itemized deductions and return deadlines.
What the math does
It counts the days between your two dates and divides by 365.25 to get years. Simple interest is deposit times rate times years. Compounded annually is deposit times ((1 + rate) to the power of years, minus 1).
A $1,500 deposit at 1% held from January 1, 2026 to January 1, 2027 comes to $14.99 either way. Stretch it out and the methods split: $2,000 at 5% over three years is about $300.07 simple and $315.33 compounded annually.
Treat the result as an estimate. Rules that pay on the anniversary date, wait six months or a year before any interest is owed, or count only full months will land a little differently. Keep your real payment records.
Where landlords owe interest on a deposit
Whether you owe interest depends on the state, sometimes the city, and sometimes how many units you own. These are rules we checked against the official text on October 10, 2026. It is a sample, not a full list.
- Massachusetts: the deposit goes in a separate interest-bearing account at a Massachusetts bank. After a year, you pay 5% a year, or the lower amount the bank actually paid, at the end of each year of the tenancy. See M.G.L. c. 186, section 15B.
- New York: a building with six or more family dwelling units must keep deposits in an interest-bearing account at a New York bank. The holder may keep 1% a year as an administrative fee, and the rest belongs to the tenant. See General Obligations Law section 7-103.
- Connecticut: interest at no less than the state deposit index for the year, and never below 1.5%, paid or credited to the tenant on each anniversary of the tenancy. See Conn. Gen. Stat. section 47a-21.
- Maryland: simple interest at the greater of the one-year U.S. Treasury yield curve rate or 1.5% a year, only on deposits of $50 or more held at least six months, counted in full months. See Real Property section 8-203.
- Minnesota: simple, non-compounded interest at 1% a year, with amounts under $1 excluded. See Minn. Stat. 504B.178. Our Minnesota landlord guide has the related deposit rules.
- Ohio: 5% a year on the part of the deposit above $50 or one month's rent, whichever is greater, if the tenant stays six months or more, paid annually. See Ohio Revised Code 5321.16.
- Illinois: landlords with 25 or more units in one building or a complex on contiguous parcels owe interest on deposits held more than six months, at the passbook savings rate of the largest Illinois commercial bank as of December 31 before the lease begins. See 765 ILCS 715/1.
- San Francisco: the city requires interest every year on deposits held over a year, and the Rent Board publishes a new rate each year. The Rent Board's deposit page lists 4.2% for March 1, 2026 through February 28, 2027.
Plenty of other states and cities have their own rules, and many have none. Start with the state landlord guides for deposit limits and return deadlines, then check your city or county. This is general information, not legal advice.
What the calculator does not apply
- Waiting periods. Maryland, Ohio and Illinois above start at six months, Massachusetts and San Francisco at a year. If you are under the threshold, you may owe nothing.
- Full-month counting. Maryland ignores partial months, so a move-out mid-month shaves a few cents.
- Administrative fees. New York lets the holder keep 1%, which you would subtract yourself.
- Unit-count exemptions, like the Illinois 25-unit line and the New York six-unit line.
When you pay interest, record it the same day. A rent receipt works as proof of payment, and the lease agreement essentials post covers where to state who holds the deposit and when interest is paid.
Frequently asked questions
Do landlords have to pay interest on security deposits?
It depends on where the property is. Massachusetts, Connecticut, Maryland, Minnesota and Ohio require it, usually with conditions on how long you hold the deposit or how large it is. New York requires an interest-bearing account for buildings with six or more family dwelling units, and Illinois covers landlords with 25 or more units. San Francisco requires it by city ordinance. Many places have no rule at all. Check your state statute and your city or county ordinances before you decide.
How is interest on a security deposit calculated?
Simple interest is the deposit times the annual rate times the years held. Compounded annually is the deposit times ((1 + rate) raised to the years held, minus 1). On a $2,000 deposit at 5% over three years, simple interest is about $300 and annual compounding is about $315. Use the rate and method your jurisdiction or lease sets.
Who keeps the interest on a security deposit?
Where a rule requires interest, it belongs to the tenant. New York is the one checked here that lets the holder keep an administrative fee of 1% a year of the deposit when it sits in an interest-bearing account. If your state has no interest rule, follow your state's deposit law and your lease.
When does the interest have to be paid?
It varies. Massachusetts, Ohio and San Francisco call for annual payment. Connecticut calls for payment or a rent credit on the tenancy anniversary, with any accrued interest due within 21 days after the tenancy ends early. Maryland and Minnesota tie it to the return of the deposit when the tenancy ends. Confirm the timing in your own state's statute.
Does the calculator work for my state or city?
It works anywhere as long as you enter the right deposit, rate, dates and method. It does not know your local rule, so it will not apply waiting periods such as six months or one year, full-month accrual, or fees. Read the rule for your area, then use the result as an estimate.
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