Security Deposit Interest Calculator by State
Find out if your state requires landlords to pay interest on security deposits and compute the interest owed. Free, no signup.
Track deposit interest automatically across every lease.
Shuk tracks deposit balances, accrual periods, and per-state interest rules in one place.
Book a DemoWhich states require landlords to pay interest on security deposits
About 14 states plus the District of Columbia require landlords to pay interest on residential security deposits: Connecticut, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, Virginia, and DC. Local ordinances in cities including Chicago and San Francisco add interest requirements even where the state does not. The remaining ~36 states do not require interest at the state level.
How deposit interest is typically calculated
Most required states use simple interest at a statutory rate, paid either annually during the tenancy or at lease termination along with the deposit refund. A few states (Maryland, Massachusetts) require interest at the higher of a floor rate or the actual yield on the bank account. Minnesota sets a flat 1% per year since 2003. Connecticut and Illinois often peg the rate to a market index (e.g. average passbook rate).
Common pitfalls
Two patterns produce most disputes. First, missing the annual payout requirement where it exists (rather than paying only at lease end). Second, commingling the deposit with operating funds in states that require a separate interest-bearing account. Both are easy to avoid with a documented monthly accrual process and a dedicated bank account for deposits.
How to use this calculator
Pick your state, enter the deposit amount, and enter the months the deposit has been held. The calculator returns the interest owed (if required) and the total amount to return at lease end. For states that don't require interest, the calculator shows the deposit amount unchanged plus a note about local ordinances to check.
Frequently asked questions
Which states require interest on security deposits?
About 14 states plus DC require interest at the state level: Connecticut, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, Virginia, and DC. Cities including Chicago and San Francisco add local requirements where the state does not.
Is the interest paid yearly or only at the end of the lease?
It varies. Some states require landlords to credit interest to the tenant annually or apply it to the next month's rent. Others pay only at lease termination along with the deposit refund. Check the specific statute for your state and document your accrual process either way.
Do landlords have to use a separate interest-bearing account?
Several states require a separate interest-bearing account for security deposits, including Illinois, Massachusetts, Maryland, New Jersey, and New York. Commingling deposits with operating funds in these states creates statutory liability beyond just the interest amount.
What happens if a landlord doesn't pay required interest?
Penalties vary by state but typically include the unpaid interest plus statutory damages (often equal to the interest amount or a multiple of the deposit) and attorney fees. Some states treat missing interest as a separate violation from a missed deposit-return deadline.
Can local ordinances require interest even if the state does not?
Yes. Chicago and San Francisco are the most-cited examples. Always check your city's landlord-tenant ordinance in addition to the state statute, especially in jurisdictions with stronger tenant-protection rules.
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