Question 1

Which states require landlords to pay interest on security deposits?

Accepted Answer

As of 2026, at least 15 states require landlords to pay interest on security deposits: Connecticut (2%), Massachusetts (5%), New Jersey (varies by balance), Ohio (5%), Maryland (1.5% or T-bill rate), Rhode Island (3.5%), Minnesota (1%), Wisconsin (varies), Iowa (varies), Florida (75% to tenant), Nevada (varies), Oregon (varies), Tennessee (varies), Washington (varies), and others. Some cities like Chicago and Boulder also have local interest requirements even in states without a statewide mandate.

Question 2

How is security deposit interest calculated?

Accepted Answer

Security deposit interest is typically calculated as: Interest = Deposit Amount × Annual Interest Rate × (Months Held / 12). Some states use simple interest, while others use daily compounding. The rate may be a fixed percentage set by state law or tied to a Treasury yield rate. The holding period includes the time from when the landlord received the deposit until it is returned.

Question 3

What happens if my landlord doesn't return my deposit with interest?

Accepted Answer

If a landlord fails to return a security deposit with required interest within the statutory deadline (typically 15-60 days depending on the state), they may be liable for penalties ranging from double to triple the deposit amount, plus attorney fees. Check your state's specific landlord-tenant law for the exact penalty and deadline.

Question 4

Does my landlord have to pay interest if my state isn't listed?

Accepted Answer

In states without a statewide interest requirement, some cities and counties have local ordinances that require interest (e.g., Chicago, Boulder, San Francisco). Additionally, your lease agreement may include a voluntary interest clause. If neither applies, interest may not be legally required, but you should still receive your full deposit back minus legitimate deductions.

Question 5

Can my landlord deduct from the security deposit?

Accepted Answer

Yes, landlords can typically deduct for unpaid rent, damage beyond normal wear and tear, cleaning costs (if specified in the lease), and other breach-of-lease costs. The landlord must provide an itemized list of deductions within the state's deadline. Interest is owed on the full deposit amount held, not just the portion returned after deductions.

Question 6

What is the deadline for returning a security deposit?

Accepted Answer

Deadlines vary by state, ranging from 14 to 60 days after the tenant moves out. Common timelines: California (21 days), New York (reasonable time), Texas (30 days), Florida (15-60 days depending on deduction status), Massachusetts (30 days). Some states require the deposit to be returned within 30 days unless deductions are being made.

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