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Security Deposit Interest Calculator
In many states — New York, Illinois, New Jersey, Massachusetts, Connecticut, Maryland, and DC among others — landlords must pay interest on held security deposits, either annually or at move-out. Rates range from the Fed's 1-year T-bill (NY) to a flat 1.5% (IL for buildings > 25 units). This calculator handles accrual across years and produces the tenant refund owed at move-out.
If your state allows it
Total refund owed at move-out
$2,201
Unpaid interest owed
$201
Gross interest accrued
$201
Admin fee retained
$60
Net rate paid to tenant
3.250%
Effective annualized rate
3.357%
How the math works
States that require deposit interest usually mandate one of: (1) annual payment or rent credit, (2) payment at move-out, or (3) option to keep a small admin fee (typical 1%) and pay the rest. The rate is either tied to a benchmark (1-year T-bill) or fixed (1.5%, 5%, etc). Many landlords default to 'pay nothing' and discover at move-out they owe three years of back interest plus penalties.
Practical compliance: keep deposits in a separate, labeled interest-bearing account (many states require separation), track the accrual on a spreadsheet, and pay annually if your state allows it — that avoids a big balloon at move-out and reduces the surface area for a statutory penalty suit.
EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.
Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.
Learn more about our review process on the EveryCalc methodology page.
How this calculator works
What this page estimates
This Security Deposit Interest Calculator is built to give a quick, browser-based estimate for security deposit interest. In many states — New York, Illinois, New Jersey, Massachusetts, Connecticut, Maryland, and DC among others — landlords must pay interest on held security deposits, either annually or at move-out. Rates range from the Fed's 1-year T-bill (NY) to a flat 1.5% (IL for buildings > 25 units). This calculator handles accrual across years and produces the tenant refund owed at move-out. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.
Calculation approach
The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.
Example workflow
For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.
Practical checks
- Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
- Run a low, base, and high case when the inputs are estimates.
- Check the related calculators below when the next decision depends on a different assumption.
How to interpret the security deposit interest result
Best use
Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.
Cross-check
Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.
Watch for
Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.
This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.
Before relying on this security deposit interest estimate
Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.
Confirm source numbers
Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.
Separate cash flow from total cost
A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.
Run conservative cases
Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.
Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.
How to Use
- Enter the deposit amount and the date it was received.
- Select the annual interest rate set by your state (or check your local statute).
- Enter years held and whether interest was already paid annually.
- The calculator accrues interest and shows the total refund owed, including any unpaid interest.
Frequently Asked Questions
Which states require deposit interest?
Currently: CT, DC, FL, IL (buildings >25 units), IA, MA, MD, MN, NH, NJ, NM (terms >1yr), NY, PA (buildings >2 units held >2 years), and ND. Rates and accrual rules vary — check your state statute, not the number here alone.
Does failing to pay interest create liability?
Yes. Most required-interest states make this a strict-liability statute. In NJ and MA, noncompliant landlords can be hit with 3x damages plus attorney fees. NY gives tenants a direct claim against the landlord and against a bank not holding in a separate account. Get this right or pay an attorney for one hour to confirm.
Can I pay interest annually?
Several states require annual payment (or credit against rent), not accrual to move-out. NY allows annual payout or 1%/year administrative fee retained by the landlord. Defaulting to 'pay at move-out' without a statute check is the usual mistake.
What interest rate should I use?
Use your state's current mandated rate. NY floats with 1-year T-bills (~4-5% recently). IL pays 0.01-0.03% (set annually). DC pays the 6-month T-bill. MA pays 5% or the actual bank rate. Don't guess — the statute controls.
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