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.

What is the Security Deposit Interest Calculator?

Calculates the accumulated interest on a residential security deposit at the statutory rate for the applicable US jurisdiction over the full tenancy period. Landlords and tenants use this at move-out to determine the correct return amount. It runs free in your browser on Gera Tools, with nothing uploaded.

Security Deposit Interest Calculator

Name: Security Deposit Interest Calculator
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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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.

Which jurisdictions require deposit interest

Statutory deposit interest is the exception rather than the rule — most US states require none at all. Among those that do:

Illinois / Chicago has required deposit interest for Chicago leases since 1986 under the Residential Landlord and Tenant Ordinance, though the applicable rate changes each year and is published by the City Comptroller.
Connecticut requires interest at a rate linked to the average savings-account rate for the deposit period.
New Jersey requires interest to be paid annually or credited against rent, with the rate tied to a state-published banking index.
Massachusetts requires interest at 5% per year (simple), payable annually on the anniversary of the tenancy or at move-out.
District of Columbia requires deposit interest tied to the Treasury bill rate, credited at move-out.

These rules change, and cities often layer additional requirements on top of state law. Always verify the current rate and method directly from your local housing authority or ordinance before calculating what is owed.

Worked example

For example: a $2,000 deposit held for 3 years at 2% simple interest accrues $120 in interest (2,000 × 0.02 × 3). The landlord owes $2,120 at move-out, minus any lawful deductions for unpaid rent or damage. At 2% compounded annually, the total is 2,000 × (1.02)^3 ≈ $2,122.42, a small difference over 3 years but a meaningful one over longer tenancies.

Tips and notes

The rate usually changes every year and is tied to a published benchmark; for long tenancies a year-by-year calculation using the rate in effect each year is more accurate than applying one rate across all years.
Some jurisdictions require interest on prepaid last-month’s rent separately from the deposit — run two calculations if your landlord holds both.
Missing or underpaying required interest can trigger statutory penalties, sometimes equal to the deposit itself, so landlords should document the source of the rate.
This is an estimate, not legal advice; verify your local ordinance.