Security Deposit Interest Laws by State: Which States Make Landlords Pay Interest

Connecticut's rate tracks bank savings rates, so it sat near zero for years, from 0.08% in 2016 to 0.06% in 2022. It jumped to 0.55% in 2024 and has eased to 0.49% for 2026.

Maryland pays the greater of this Treasury yield or 1.5%. In 2021 and 2022 the floor did the work; since 2023 the Treasury rate has been higher, at 3.47% for 2026.

Fixed statutory rates and Treasury-linked rates pay far more than bank-linked ones. Ohio's 5% only reaches the part of a deposit above one month's rent, so the headline rate overstates what most Ohio tenants see.

Only 9 jurisdictions require interest on an ordinary deposit. Another 6 require it in narrow cases, such as Illinois buildings with 25 or more units, and 36 have no statewide rule at all.

How deposit interest is calculated where it is required

Source: Connecticut Department of Banking, Banking Commissioner Announces 2026 Deposit Index; Maryland General Assembly, Maryland Code, Real Property § 8-203 (Security deposits); Akerman LLP / Thomson Reuters Practical Law, Security Deposit Laws (Residential Lease): State Comparison Chart (Akerman LLP with Practical Law); Minnesota Office of the Revisor of Statutes, Minnesota Statutes § 504B.178 (Interest on deposits); FindLaw (reproduction of state code), Ohio Revised Code § 5321.16 (Security deposits); Illinois Department of Financial and Professional Regulation, Division of Banking, Interest Rates Affecting the Security Deposit Interest Act; Chicagoland Apartment Association, 2026 Illinois and Chicago Security Deposit Interest Rates; San Francisco Tenants Union (reprinting the San Francisco Rent Board notice), New Interest Rate for Security Deposits Effective 3/1/26; New York State Senate, New York General Obligations Law § 7-103; New Jersey Department of Community Affairs, Truth in Renting: A guide to the rights and responsibilities of residential tenants and landlords in New Jersey; North Dakota Legislative Branch, North Dakota Century Code ch. 47-16, § 47-16-07.1; Council of the District of Columbia, Interest on Rental Security Deposits Amendment Act of 2006 (D.C. Act 16-276); Florida Legislature, Florida Statutes § 83.49 (Deposit money or advance rent). Download as image

Security deposit interest requirement by state

• 9Interest required
• 6Required only in limited cases
• 36No statewide requirement

Do landlords have to pay interest on security deposits?

Usually not. In 36 jurisdictions there is no statewide rule, so the landlord can hold your deposit in a regular account and keep any interest. A lease can still promise interest, and if it does, that promise is enforceable like any other term.

Where interest is required, the rule takes one of three shapes. Some states set a fixed rate in the statute: Minnesota pays 1% simple and Ohio pays 5% on the excess. Some tie the rate to a published benchmark: Connecticut uses a yearly deposit index and Maryland uses the 1-year Treasury yield with a 1.5% floor. The rest just say the deposit must sit in an interest-bearing account and the tenant gets what it earns. New Jersey, North Dakota and DC work that way.

Cities can add their own rules. San Francisco and Chicago both require interest even though California has no statewide requirement and the Illinois act only covers larger buildings.

Which states pay the most interest on a security deposit?

On paper, Ohio's 5% looks like the best deal. But Ohio only pays on the part of the deposit above $50 or one month's rent, whichever is greater, and only if you stay six months or more. If your deposit equals one month's rent, you get nothing. If your landlord took more than that, write down the excess and check that 5% on it shows up each year.

Maryland is the strongest broad rule right now. Tenants get the greater of the 1-year Treasury rate on the first business day of the year or 1.5%. For 2026 that benchmark was 3.47%. It applies to deposits of $50 or more held at least six months, and the landlord has 45 days after the tenancy ends to pay it with the deposit.

San Francisco's rate for March 2026 through February 2027 is 4.2%, down from 5.0% the year before. At the other end, the Illinois act pays 0.005% for 2026 leases and Chicago's ordinance pays 0.01%. The Illinois figure comes from a bank savings rate, which is why it barely registers.

Why are some deposit interest rates so low?

Any rule that follows a bank savings rate moves with it. Connecticut's deposit index sat near zero for most of the last decade, then rose to 0.55% in 2024 as rates climbed. The 2026 figure is 0.49%.

The New York and Pennsylvania rules cut it further. In both, the landlord may keep a 1% yearly fee out of the account's interest. When the account earns less than that fee, the tenant's share can be close to zero. That is legal, but only if the landlord follows the account rules, which in New York apply to buildings with six or more units.

Low rates do not mean the law is pointless. Many of these statutes also require a separate account, written notice of where the money is held, and in some states a yearly interest statement. Those requirements protect the deposit itself, and in New Jersey a landlord who skips them can end up owing the tenant 7% interest.

Small print that decides whether you get paid

• Holding period. Maryland, Ohio and Illinois need six months, Pennsylvania starts paying from the third year, and New Hampshire after one year.
• Building size. The Illinois act covers only 25 or more units. New York's mandatory account rule starts at six units. New Jersey exempts owner-occupied buildings with two or fewer rental units unless the tenant gives 30 days' written notice.
• Deposit size. Maryland needs $50 or more, Pennsylvania covers deposits over $100, and Minnesota skips interest amounts under $1.
• Late rent. Connecticut drops interest for a month in which rent was more than 10 days late, unless the landlord charged a late fee.
• Landlord choice. Florida owes interest only if the landlord picks an interest-bearing account or a surety bond. Iowa lets the landlord keep account interest for the first five years.

What should small landlords and property managers do?

If you own a few rental units, deposit interest is easy to get wrong because the rule can change with the size of your building, the length of the tenancy and the city. A landlord with a duplex in New Jersey and a fourplex in Chicago faces two different systems.

Set up a separate account for deposits in any state that requires one, and keep a simple ledger by tenant: deposit amount, date received, account, and the rate that applies each year. Rate-linked rules change every year, so put a reminder on your calendar. Connecticut announces its index in December, and Maryland's rate follows the Treasury yield on the first business day of January.

Write the rule into your lease in plain terms. Tell tenants where the deposit is held, what it earns, and when you will pay or credit the interest. A clear clause heads off a lot of arguments, and in states with notice rules it is part of complying with the law.

Finally, show the interest as its own line on every move-out statement. Tenants can see what they got, and you have a record if anyone asks later.

How do you collect security deposit interest?

Start with your state row on the map. If your state requires interest, note when it is paid: some states pay or credit it each year, others only at move-out.

Then read your lease and any deposit receipt. Look for the bank name, the account type and the interest rate. Several states require landlords to tell you this in writing. If nothing is there, ask for it by email so you have a record.

At move-out, check the itemized statement. The interest should appear as its own line, added to whatever deposit is returned. If it is missing, send a short written request citing your state law. In New Jersey, a tenant may apply the deposit plus 7% interest to rent if the required notices or interest are not provided, which shows how seriously some states treat this.

Business tenants should know these statutes are written for residential leases. On a commercial lease, interest on a deposit is a negotiating point, not a right, so put it in the lease if you want it.

Sources and method

Every number on this page comes from the sources below, each opened and read on or before October 18, 2026. A second, independent review checked every figure against its source and corrected anything that did not match. 51 of 51 state entries were confirmed; any that could not be are marked "Not yet confirmed" and left out of every count and chart.

1. Connecticut Department of Banking, Banking Commissioner Announces 2026 Deposit Index (December 9, 2025)
2. Connecticut Department of Banking, Deposit Index and Interest Rates (2026 rates page, read October 2026)
3. FindLaw (reproduction of state code), Connecticut General Statutes § 47a-21 (Security deposits) (Current as of January 1, 2025)
4. Illinois Department of Financial and Professional Regulation, Division of Banking, Interest Rates Affecting the Security Deposit Interest Act (January 5, 2026)
5. Chicagoland Apartment Association, 2026 Illinois and Chicago Security Deposit Interest Rates (January 6, 2026)
6. Minnesota Office of the Revisor of Statutes, Minnesota Statutes § 504B.178 (Interest on deposits) (Current statutes, read October 2026)
7. FindLaw (reproduction of state code), Ohio Revised Code § 5321.16 (Security deposits) (Current as of January 1, 2026)
8. Maryland General Assembly, Maryland Code, Real Property § 8-203 (Security deposits) (2026 Regular Session statute text)
9. New York State Senate, New York General Obligations Law § 7-103 (Current law, read October 2026)
10. Council of the District of Columbia, Interest on Rental Security Deposits Amendment Act of 2006 (D.C. Act 16-276) (Enrolled original, 2006)
11. North Dakota Legislative Branch, North Dakota Century Code ch. 47-16, § 47-16-07.1 (Current code PDF, read October 2026)
12. New Jersey Department of Community Affairs, Truth in Renting: A guide to the rights and responsibilities of residential tenants and landlords in New Jersey (PDF revised August 2025)
13. Florida Legislature, Florida Statutes § 83.49 (Deposit money or advance rent) (The 2026 Florida Statutes)
14. Iowa Legislature, Iowa Code § 562A.12 (Rental deposits) (Iowa Code 2026)
15. Virginia Legislative Information System, Code of Virginia § 55.1-1226 (Security deposits) (Current code, read October 2026)
16. Akerman LLP / Thomson Reuters Practical Law, Security Deposit Laws (Residential Lease): State Comparison Chart (Akerman LLP with Practical Law) (2020 (Resource ID W-024-4620))
17. San Francisco Tenants Union (reprinting the San Francisco Rent Board notice), New Interest Rate for Security Deposits Effective 3/1/26 (January 21, 2026)
18. U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates (1 Yr column), 2020 to 2026 (Daily data; first business day of January 2020 to 2026)