Leases and deposits
Does my landlord have to pay interest on my security deposit?
Updated By the Housing Rocket moderators
Short answer
Only in some places. Most states don't require landlords to pay interest on security deposits, but a handful of states and some cities do, sometimes only after the deposit has been held for a set period or for buildings above a certain size. Where it applies, interest is often paid yearly or when you move out.
Some of the same laws also control where the deposit is kept. In certain states the landlord must hold it in a separate account, sometimes at a bank in that state, and tell you in writing where it is. The interest rates involved are often low, so the amount is rarely large, but landlords who ignore these rules can face penalties.
To find out what applies to you:
- Search your state attorney general or housing agency site for its tenant guide
- Check your city's rent board or housing department, since some cities have their own rules
- Read your lease and deposit receipt, which may say where the deposit is held
If interest is required and you haven't received it, ask the landlord in writing. Many small landlords simply don't know the rule. Keep track of it so you can check the amount when your deposit comes back at move-out.
Want the whole picture? Read Renting Your First Apartment: Applications, Leases and Move-in Costs.