Which states require deposit interest?

Only some jurisdictions mandate it, including Illinois (and Chicago), Connecticut, New Jersey, New York, Maryland, Massachusetts, Minnesota, Pennsylvania, and the District of Columbia, among others. Many states require none. Rates and rules differ sharply, so confirm your exact local ordinance before relying on a figure.

Is the interest simple or compound?

It varies by jurisdiction. Some require simple interest on the original deposit each year, while others require interest compounded annually. This tool lets you choose both methods so you can match your local statute, which usually specifies which applies.

How is the statutory rate set?

Many jurisdictions tie the rate to a benchmark such as a bank savings rate, a treasury bill index, or a figure published annually by a state agency or city comptroller. Because it changes each year, enter the current published rate for the relevant period rather than assuming a fixed number.

When must the interest be paid?

Rules differ — some require annual payment or a credit against rent each year, others require it only at move-out with the deposit return. Late or missing interest can expose a landlord to penalties, sometimes equal to the deposit itself, so timely payment matters.

Does interest apply to last month's rent too?

In several jurisdictions, prepaid last-month's rent held by the landlord also accrues statutory interest, separately from the security deposit. If your landlord holds both, run the calculation for each amount and check whether your local law treats them the same way.

Security Deposit Interest Calculator

A number of US states and cities require landlords to pay tenants interest on security deposits they hold. This calculator estimates that interest at the statutory annual rate over the tenancy, using either simple or annually compounded interest, so both sides can agree on the correct move-out refund.

How it works

Simple interest pays the rate on the original deposit each year; compound interest adds each year’s interest to the balance before the next year accrues:

simple:    interest = deposit × rate% × years
compound:  total    = deposit × (1 + rate%)^years
           interest = total − deposit
total_due  = deposit + interest

Choose the method your jurisdiction specifies. The total due is the amount the landlord should return, minus any lawful deductions for unpaid rent or damage.

Tips and notes

Statutory deposit interest is the exception, not the rule — most states require none, so first confirm whether your city or state mandates it at all. Where it applies, the rate usually changes every year and is tied to a published benchmark, so use the rate in force for each period rather than a single fixed number; for long tenancies a blended or year-by-year calculation is more accurate than one rate across all years. Some jurisdictions also require interest on prepaid last-month’s rent. Missing or underpaying required interest can trigger statutory penalties, so landlords should document the rate source. This is an estimate, not legal advice; verify your local ordinance.