Security Deposit Interest Calculator
Calculate the interest your landlord may owe on your security deposit where required by law.
How to use this tool
- Enter security deposit, annual interest rate and months held in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your interest earned and the full breakdown beneath it.
This is an estimate, not legal advice. Laws vary by jurisdiction and individual circumstances. Consult a qualified attorney before making any legal decisions.
Estimate the interest a landlord owes on a security deposit. Many jurisdictions require landlords to hold deposits in interest-bearing accounts and return interest to tenants. Rates and rules vary by location.
Formula
Interest ($) = deposit × (annual rate ÷ 100) × (months ÷ 12)
Total to be returned ($) = deposit + interest
How it works
This calculator applies simple interest to a security deposit using a months-based fraction of the annual rate, matching the approach used in most state security-deposit interest statutes. It does not compound interest across months. The applicable interest rate varies by jurisdiction and is sometimes set annually by statute or regulation; tenants should verify the current statutory rate for their location before using this figure in a dispute.
Worked example
Worked example
- Inputs: security deposit = $2 000, annual rate = 5 %, months held = 12.
- Interest: $2 000 × (5 ÷ 100) × (12 ÷ 12) = $2 000 × 0.05 × 1 = $100.
- Total to be returned: $2 000 + $100 = $2 100.
Interest earned: $100; total to be returned: $2 100.
Key terms
- Security deposit
- A sum of money paid by a tenant to a landlord at the start of a tenancy, held as security against unpaid rent or damage beyond normal wear and tear.
- Statutory interest rate
- The annual interest rate mandated by state or local law that landlords must pay tenants on held security deposits.
- Simple interest
- Interest calculated on the original principal only, without adding prior interest to the base for subsequent calculations.
- Deposit withholding
- A landlord's retention of part or all of a security deposit to cover unpaid rent or repair costs, which must typically be itemised in writing within a statutory deadline.
- Normal wear and tear
- Gradual, minor deterioration of a rental property expected from ordinary use, for which a landlord generally cannot deduct from the security deposit.
Frequently asked questions
- Does every state require security deposit interest?
- No. Only some states and cities require landlords to pay interest on security deposits. States such as Connecticut, Massachusetts, and New Jersey have such laws; many others do not.
- How is the interest rate set?
- The rate is typically set by statute or ordinance and may change annually. Common methods include a fixed statutory rate or a rate tied to a savings-account benchmark.
- When must the deposit and interest be returned?
- Most jurisdictions require return within 14–30 days of lease termination, along with an itemized deduction statement. Missing this deadline can result in penalties of double or triple the deposit amount.