Security Deposit Interest Calculator
Check security deposit caps, return deadlines and interest rules for 20 states, and calculate the interest owed for your holding period.
Interest rules are conditional and change
Several states require interest only above a unit count, a holding period or a deposit size, and many tie the rate to an index that resets each year. Pick your state to see its statute summary, then enter the rate your statute requires for the period.
Deposit Details
25+ units: rate paid by the largest Illinois bank on passbook savings as of Dec. 31 of the prior year, on deposits held over 6 months; paid within 30 days after each 12-month period. (765 ILCS 710/1; 765 ILCS 715/1–2)
Statutory cap: No state cap (Chicago and some other cities have ordinances).
Enter the rate your statute requires for this period (for example Minnesota 1%, Massachusetts 5% or the lower bank rate, Maryland the greater of the 1-year Treasury rate or 1.5%), or the rate your account actually paid.
Your Results
25+ units: rate paid by the largest Illinois bank on passbook savings as of Dec. 31 of the prior year, on deposits held over 6 months; paid within 30 days after each 12-month period.
Cap: No state cap (Chicago and some other cities have ordinances).
Return deadline: Itemized statement with receipts within 30 days to withhold for damage; otherwise return in full within 45 days.
Penalty: Bad faith or refusal to itemize: 2× the deposit due + costs and fees. Willful failure to pay interest: amount equal to the deposit + fees.
Source: 765 ILCS 710/1; 765 ILCS 715/1–2. Cities can add stricter rules; check local ordinances.
Interest Calculation Timeline
Example calculation (illustrative rate)
Scenario: $2,000 deposit held for 12 months at 3% annual interest
Monthly accrual: $2,000 × 3% ÷ 12 = $5.00 per month
Total interest (12 months): $5.00 × 12 = $60.00
Amount to return: $2,000 (deposit) + $60 (interest) = $2,060
Compliance Requirements Checklist
✓ Account Requirements
- • Open separate interest-bearing account (if required)
- • Use federally insured bank or savings institution
- • Maintain detailed records of deposits and interest
- • Keep bank statements for audit trail
- • Do not commingle with personal/operating funds
✓ Notification Requirements
- • Provide written notice of bank name and address
- • Disclose interest rate in writing
- • Send annual statements (if required by state)
- • Include interest notification in lease
- • Notify tenant of any account changes
Best Practices for Compliance
✅ Do This
- • Calendar each tenant’s interest and return deadlines
- • Include deposit interest clause in lease agreement
- • Provide written notification within required timeframe
- • Keep detailed records of all deposits and payments
- • Use separate account if required by state
- • Pay interest on time (annual or at move-out)
- • Verify current interest rates annually
- • Consult local attorney for compliance
❌ Don't Do This
- • Assume your state doesn’t require interest without reading the statute
- • Skip written notification to tenants
- • Commingle deposits where your state requires a separate account
- • Pay interest late or "whenever convenient"
- • Use arbitrary interest rate without checking law
- • Ignore local city/county requirements
- • Fail to document deposit and interest payments
- • Assume a missed deadline can be fixed later (in several states it forfeits deductions)
Related Resources
Tenant Screening
Legal Guides
Financial Tools
Security Deposit Rules in Plain English
Every state sets its own rules for how much deposit you can collect, how fast you must return it, what you can deduct, and whether you owe interest. Getting any of them wrong can cost far more than the deposit itself. This page summarizes the rules in 20 states, each checked against the official statute in October 2026, then walks through interest math, an itemized deduction example, and the disputes that most often end up in small claims court.
The calculator above uses the same verified statute summaries as the table below. Pick your state to see its cap, return deadline, interest rule and penalty, then enter the interest rate your statute requires for the period. Many rates float with an index that resets each year, so the calculator does not guess the rate for you.
Cities and counties can add stricter rules (Chicago, New York City and several California cities are well-known examples), and statutes are amended often. Always read the current statute and any local ordinance before setting deposit terms or making deductions.
State-by-State Rules: Limits, Deadlines, Interest and Penalties
The table condenses each statute; most have exceptions and procedural details that are not shown. Deadlines usually run from the end of the tenancy and the tenant’s surrender of the unit, and in some states from receipt of a forwarding address.
| State | Deposit limit | Return deadline | Interest | Penalty | Statute |
|---|---|---|---|---|---|
| California | 1 month’s rent; 2 months for a landlord who is a natural person (or LLC of natural persons) owning no more than two rental properties with no more than four units total, except from service members. Applies to deposits collected on or after July 1, 2024. | 21 days after move-out, itemized; copies of invoices or receipts unless deductions total $125 or less; photos at move-out (and at move-in for tenancies beginning on or after July 1, 2025). | Not required by § 1950.5; check local ordinances. | Bad faith: up to twice the deposit plus actual damages. | Cal. Civ. Code § 1950.5 |
| Texas | No statutory cap. | 30 days after surrender, with written itemized list; landlord need not refund until tenant gives a written forwarding address. | Not required. | Bad faith retention: $100 + 3× the amount wrongfully withheld + attorney’s fees. | Tex. Prop. Code §§ 92.103, 92.104, 92.107, 92.109 |
| Florida | No statutory cap. | 15 days if no claim; otherwise written notice of claim by certified mail (or permitted email) within 30 days; tenant has 15 days to object. | Only if held in an interest-bearing account: at least 75% of the account’s annualized average rate or 5% simple, landlord’s choice; paid at least annually. | Missing the 30-day notice forfeits the right to impose a claim on the deposit. | Fla. Stat. § 83.49 |
| Illinois | No state cap (Chicago and some other cities have ordinances). | Itemized statement with receipts within 30 days to withhold for damage; otherwise return in full within 45 days. | 25+ units: rate paid by the largest Illinois bank on passbook savings as of Dec. 31 of the prior year, on deposits held over 6 months; paid within 30 days after each 12-month period. | Bad faith or refusal to itemize: 2× the deposit due + costs and fees. Willful failure to pay interest: amount equal to the deposit + fees. | 765 ILCS 710/1; 765 ILCS 715/1–2 |
| New York | 1 month’s rent (limited exceptions). | 14 days after the tenant vacates, with itemized statement, or the landlord forfeits the right to retain any portion. | Buildings with 6+ units: interest-bearing account at the prevailing rate; landlord may keep 1% per year as an administration fee. | Actual damages; willful violation: punitive damages up to 2× the deposit. | N.Y. Gen. Oblig. Law §§ 7-103, 7-108 |
| Massachusetts | Security deposit up to the first month’s rent (plus first and last month’s rent). | 30 days after the tenancy ends, with itemized list of damages. | Deposits held 1 year or more: 5% a year or the lesser amount the bank paid; paid annually. Separate interest-bearing Massachusetts bank account required. | For certain violations: 3× the deposit due + 5% interest + costs and fees. | Mass. Gen. Laws ch. 186, § 15B |
| New Jersey | 1.5 months’ rent; annual increases limited to 10% of the current deposit. | 30 days, with interest earned and itemized deductions. | Interest earned belongs to the tenant; paid or credited annually. | Double the amount wrongfully withheld + costs and fees. | N.J.S.A. 46:8-19, 46:8-21.1, 46:8-21.2 |
| Pennsylvania | 2 months’ rent in the first year; 1 month thereafter. | 30 days, with a written list of damages. | Deposits over $100, after the second anniversary: interest earned less a 1% per year administrative fee; paid annually. | No list in 30 days forfeits the right to withhold for damage; failure to pay the balance: double the amount owed. | 68 P.S. §§ 250.511a, 250.511b, 250.512 |
| Maryland | 1 month’s rent (up to 2 months in a limited utility-assistance situation). | 45 days, with written itemized list sent by first-class mail. | Simple interest at the greater of the 1-year Treasury rate (first business day of the year) or 1.5%; deposits of $50+ held at least 6 months; paid on return. | Up to 3× the amount withheld + fees; up to 3× any excess deposit charged. | Md. Code, Real Prop. § 8-203 |
| Virginia | 2 months’ rent. | 45 days, itemized written notice. | No interest requirement in the current text of § 55.1-1226. | Return of deposit + actual damages + reasonable attorney fees. | Va. Code § 55.1-1226 |
| Connecticut | 2 months’ rent; 1 month if the tenant is 62 or older. | Later of 21 days after termination or 15 days after receiving a forwarding address; itemized. | Required at not less than the deposit index set for each year; paid or credited on each anniversary. | 2× the deposit (interest-only violation: greater of $10 or 2× the interest). | Conn. Gen. Stat. § 47a-21 |
| Ohio | No statutory cap. | 30 days, itemized notice; tenant must provide a forwarding address. | 5% a year on the amount above the greater of $50 or one month’s rent, if the tenant stays 6+ months; paid annually. | Amount wrongfully withheld plus equal damages + attorney’s fees. | Ohio Rev. Code § 5321.16 |
| Minnesota | Not set in § 504B.178. | 3 weeks after termination (and receipt of mailing address), with written statement of reasons. | 1% simple, noncompounded. | Amount withheld + interest; bad faith: punitive damages up to $500 per deposit. | Minn. Stat. § 504B.178 |
| Iowa | 2 months’ rent. | 30 days after termination and receipt of mailing address; written statement of reasons. | Interest earned during the first five years of the tenancy belongs to the landlord. | Missing the statement forfeits the right to withhold any portion. | Iowa Code § 562A.12 |
| New Hampshire | Greater of 1 month’s rent or $100. | 30 days, itemized with evidence of repairs. | Deposits held 1 year or more: the rate paid by the bank or credit union where held. | 2× the deposit plus interest due, less lawful charges. | N.H. RSA 540-A:6, 540-A:7, 540-A:8 |
| North Dakota | 1 month’s rent (2 months in two listed situations); separate limits for pet deposits. | 30 days, itemized. | Must be held in a federally insured interest-bearing account; interest goes to the tenant, except no interest is owed if occupancy was under 9 months. | Treble damages for money withheld without reasonable justification. | N.D. Cent. Code § 47-16-07.1 |
| Washington | No cap in RCW 59.18.260; a written rental agreement and move-in condition checklist are required to collect any deposit. | 30 days, full and specific statement with supporting documentation. | Not required. | Liable for the full deposit; up to 2× for intentional refusal. | RCW 59.18.260, 59.18.280 |
| Oregon | No statewide amount cap in ORS 90.300. | 31 days, written accounting. | Not required. | 2× the amount withheld without accounting or in bad faith. | ORS 90.300 |
| Arizona | 1.5 months’ rent (tenant may voluntarily prepay more rent). | 14 days, excluding weekends and holidays, after termination, delivery of possession and tenant demand; itemized. | Not required. | 2× the amount wrongfully withheld. | A.R.S. § 33-1321 |
| North Carolina | 2 weeks’ rent (week-to-week), 1.5 months (month-to-month), 2 months (longer terms). | 30 days, itemized; if damages cannot be determined, interim accounting in 30 days and final within 60 days. | Not addressed in G.S. 42-51 or 42-52. | Willful noncompliance voids the right to retain any portion; damages and possible attorney’s fees. | N.C. Gen. Stat. §§ 42-51, 42-52, 42-55 |
States not listed here (for example Colorado, Georgia and New Mexico) have their own rules; check the statute directly. For deeper coverage of five large states, see the state legal guides for California, Florida, Illinois, New York and Texas, or the state legal guides hub.
Deposit Limits: Setting the Right Amount
Caps are usually expressed in months of rent, and many statutes count anything collected as security, however it is labelled. California’s statute, for example, defines security to include any payment, fee or deposit imposed at the start of the tenancy other than the first month’s rent, and forbids calling any of it “nonrefundable” (Cal. Civ. Code § 1950.5(b), (n)). Pet deposits, “cleaning fees” and last month’s rent can count toward the cap depending on the state. North Dakota sets a separate limit for pet deposits, and Oregon and North Dakota forbid pet deposits for assistance animals a tenant with a disability needs as a reasonable accommodation.
Within the cap, charge every applicant according to the same written policy. Varying deposits by protected characteristics, or charging extra for an assistance animal, violates fair housing law. The fair housing cheat sheet covers the basics.
Interest Rules: Who Owes What
Interest obligations take four main forms, which is why a single national rate is misleading:
- Fixed statutory rate: Minnesota 1% simple; Massachusetts 5% (or the lower amount the bank paid); Ohio 5% but only on the part of the deposit above the greater of $50 or one month’s rent.
- Floating benchmark: Maryland, the greater of the 1-year Treasury rate or 1.5%; Connecticut, the annual deposit index; Illinois (25+ units), the largest Illinois bank’s passbook rate.
- Pass-through of interest actually earned: New Jersey, New Hampshire, North Dakota, New York (6+ units, less a 1% fee) and Pennsylvania (after two years, less a 1% fee).
- Conditional or optional: Florida owes interest only if the landlord elects the interest-bearing account option; Iowa lets the landlord keep interest earned in the first five years.
Three quick calculations show how different the results are:
- Maryland: a $1,800 deposit held 24 months. If the applicable rate is the 1.5% floor, interest is $1,800 × 1.5% × 2 = $54, payable with the deposit within 45 days. If the Treasury rate is higher, use it.
- Massachusetts: the same $1,800 held one year earns up to $1,800 × 5% = $90, payable at the end of the tenancy year, unless the bank paid less.
- Ohio: rent $1,500, deposit $2,000. Interest applies only to the $500 above one month’s rent: $500 × 5% = $25 a year, owed only if the tenant stays at least six months.
Itemization: What a Defensible Statement Includes
Nearly every state requires a written, itemized statement when you keep any part of a deposit, and some require supporting documents. California requires copies of invoices or receipts for deductions over $125 and photographs; Illinois requires paid receipts or estimates followed by receipts; Washington requires estimates or invoices; New Hampshire requires satisfactory evidence that repairs have been or will be done. A strong statement includes:
- The deposit amount and any interest owed.
- Each deduction as a separate line, with the location, the condition, and why it exceeds normal wear and tear.
- The cost of each item, with invoices, receipts, estimates or your labor at a reasonable hourly rate.
- Unpaid rent or other lease charges, with the period they cover.
- The balance refunded, or the amount still owed by the tenant.
- Proof of when and how you delivered it, using the method your statute requires.
Worked Deduction Example
Example (hypothetical): rent is $1,800 a month and the tenant paid a $1,800 deposit. After a three-year tenancy, the move-out inspection, compared with dated move-in photos, finds:
| Patch and paint three anchor holes in the living room wall | $140 |
| Pet-stained bedroom carpet: replacement $1,500; carpet was 6 years into a 10-year life, so 40% remaining value | $600 |
| Replace missing smoke alarm | $35 |
| Clean oven and refrigerator left dirty (3 hours at $40) | $120 |
| Faded paint, light scuffs, worn hallway carpet (normal wear and tear) | $0 |
| Total deductions | $895 |
| Refund due ($1,800 − $895), plus any interest your state requires | $905 |
Two choices make this statement defensible. The carpet is charged at its remaining value ($1,500 × 40%), not the full $1,500, because the tenant should not pay for wear the carpet would have suffered anyway. And the normal wear items are listed at zero, which shows the tenant (and a judge) that you separated wear from damage. In Pennsylvania, for instance, this deposit would also have earned interest after its second anniversary; in Massachusetts it would have earned interest annually from the start. In California, a deduction this size requires the receipts and photographs described above.
Common Disputes and How to Avoid Them
- Wear and tear vs damage. The most common dispute. Prevent it with a signed move-in condition report and dated photos; several states (Washington, for one) require a written move-in checklist before you can collect a deposit at all. The move-in/move-out inspection checklist helps.
- Missed deadlines. In New York, Florida, Pennsylvania and Iowa, missing the deadline or notice can forfeit your right to keep any of the deposit for damage, even if the damage is real. Calendar the deadline the day the tenant moves out.
- Charging full replacement cost. Prorate items with a limited life, such as carpet, paint and blinds.
- Unsupported amounts. “Cleaning: $400” with no detail invites a challenge. Show hours, rates and receipts.
- Pre-inspection rights ignored. California and New York give tenants the right to request an inspection before move-out so they can fix problems first. In California, if that initial inspection takes place, deductions for repairs or cleaning are generally limited to the items identified in the written statement, apart from damage hidden by the tenant’s belongings or occurring afterward.
- Sale of the property. Many states make the buyer responsible for deposits held by the seller. Transfer deposits and interest at closing and notify tenants as your statute requires.
- Mixing deposits with operating funds. Several states (Massachusetts, Maryland, New York, Iowa and others; Florida unless the landlord posts a surety bond) require deposits to be held separately or in specific accounts. Commingling can itself trigger penalties.
If a dispute does arise, deposit cases are commonly heard in small claims court, and in several states (California, Texas, New York and Iowa among them) the landlord bears the burden of proving deductions were reasonable. Good records win these cases.
Deposits When You Sell or Exit
Selling a tenant-occupied rental means transferring every deposit and any accrued interest to the buyer and documenting it, under statutes such as Cal. Civ. Code § 1950.5(i)–(j) and 765 ILCS 710/1.1. If you are weighing whether to keep or sell, run your numbers in the keep-or-sell rental property calculator, and see the security deposit interest guide, the move-in/move-out inspection guide and the lease agreement template for deposit clauses.
Frequently asked questions
Which states require landlords to pay interest on security deposits?
Among the states summarized on this page, Connecticut, Maryland, Massachusetts (deposits held a year or more), Minnesota, New Hampshire (deposits held a year or more), New Jersey, North Dakota, Ohio (on the portion above a threshold, for tenancies of six months or more) and Pennsylvania (after the second year) require interest in at least some situations. Illinois requires it for buildings or complexes with 25 or more units, New York requires an interest-bearing account for buildings with six or more units, and Florida requires interest only if the landlord chooses to hold the deposit in an interest-bearing account. Rules are conditional and change, and cities can add their own, so read your state statute.
How is security deposit interest calculated?
Most statutes use simple interest: deposit multiplied by the annual rate multiplied by the time held. A $1,800 deposit held two years at 1.5% earns $54. But the rate and base differ by state. Maryland uses the greater of the 1-year Treasury rate or 1.5%; Massachusetts uses 5% or the lower amount the bank actually paid; Ohio pays 5% only on the part of the deposit above the greater of $50 or one month’s rent; Pennsylvania and New Jersey pass through interest actually earned. Use the rule for your state and each year the deposit was held.
How much security deposit can I charge?
It depends on the state. Examples from the statutes: California generally allows one month’s rent for deposits collected since July 1, 2024, or two months for certain small landlords; New York and Maryland generally one month; Arizona one and one-half months; New Jersey one and one-half months; Connecticut two months (one month for tenants 62 or older); Pennsylvania two months in the first year and one month after; Virginia two months. Texas and Florida set no statutory cap. Cities can be stricter, so check local ordinances too.
How long do I have to return a security deposit?
Deadlines range widely. New York is 14 days; Arizona is 14 days excluding weekends and holidays after the tenant demands it; California and Connecticut are 21 days (Connecticut, or 15 days after receiving a forwarding address if later); Minnesota is three weeks; Texas, Illinois (for the itemized statement), Massachusetts, New Jersey, Pennsylvania, Ohio, Iowa, New Hampshire, North Dakota and Washington are 30 days; Oregon is 31 days; Maryland and Virginia are 45 days. Florida requires return within 15 days if you make no claim, or a written notice of claim within 30 days. Always check the statute for when the clock starts.
What can I deduct from a security deposit?
Generally unpaid rent and the cost of repairing damage beyond normal wear and tear, plus other charges your state allows (some allow cleaning to return the unit to its move-in condition, or unpaid utilities owed to the landlord). You cannot charge for ordinary wear and tear or for conditions that existed before the tenancy. Most states require a written, itemized statement, and several require receipts or estimates.
What is the difference between normal wear and tear and damage?
Wear and tear is the gradual deterioration that comes from ordinary living: faded paint, light scuffs, carpet worn in walkways, loose door handles. Damage is harm beyond ordinary use: holes in walls, burns or pet stains in carpet, broken fixtures, missing items. When you charge for damage to an item with a limited life, such as carpet or paint, a fair charge reflects the item’s remaining useful life rather than full replacement cost.
What happens if I miss the deadline or fail to itemize?
Consequences can be severe and are often automatic. In New York, a landlord who misses the 14-day deadline forfeits the right to keep any portion of the deposit. In Florida, missing the 30-day notice of claim forfeits the right to impose a claim. In Texas, a landlord who in bad faith retains a deposit is liable for $100, three times the amount wrongfully withheld, and attorney’s fees. Massachusetts can award three times the deposit for certain violations. The penalty is usually far larger than the amount in dispute.
Where do the calculator’s state rules come from?
The calculator shows the same statute summaries as the table on this page, each checked against the official statute in October 2026. Because many states tie the rate to an index that resets each year (a bank passbook rate, the 1-year Treasury rate or a published deposit index), the calculator asks you to enter the rate for your period rather than guessing it. Statutes change, so confirm the current text before relying on any figure.
General information, not legal advice. State summaries were checked against official statute sources in October 2026 and condense laws that contain exceptions; local ordinances may be stricter, and laws change. Consult a licensed attorney in your state before relying on any figure here.