About the Security Deposit Interest Calculator
This security deposit interest calculator estimates how much interest a landlord owes a tenant on a rental security deposit. Pick a statutory rule — Minnesota’s 1% simple interest, Massachusetts’ 5% (or the lower bank rate), or Ohio’s 5% on the part of the deposit above one month’s rent — or enter any rate that applies where you live, such as a city or state rate published each year or the interest your landlord’s bank account actually paid.
Tenants can use it when a lease ends to check the refund, and landlords can use it to calculate the annual interest statement or the amount to return with the deposit. It also shows how much interest builds up each year of the tenancy.
Most US states do not require landlords to pay interest on deposits at all; those that do set very specific rules about rates, timing and minimum tenancy, and some cities (for example several in California, plus Chicago and Washington, DC) have their own. The rules built in here summarize the statutes cited below; check the full text and any local ordinance before relying on the figure.
With the default inputs, the interest owed is $30.00. Change any value above to recalculate instantly.
How to use the security deposit interest calculator
- 1Choose the rule for your state, or Other to enter a local or bank rate.
- 2Enter the security deposit and how many months it was held.
- 3For Ohio, enter the monthly rent; for Massachusetts, enter the bank rate if it was below 5%.
- 4Read the interest owed and the total refund before deductions.
Formula and method
Statutory deposit interest is almost always simple interest: the amount earning interest (B) times the annual rate times the time held in years. Minnesota uses 1% a year on the whole deposit. Massachusetts uses 5% a year, or the lower rate actually paid by the bank holding the deposit. Ohio pays 5% a year only on the part of the deposit that exceeds the greater of $50 or one month’s rent, and only when the tenant stays at least six months.
For any other jurisdiction, enter the published rate or the bank rate and choose whether interest compounds annually. Results are before lawful deductions for unpaid rent or damage, which are subtracted from the deposit, not from the interest calculation.
- I
- Interest owed
- B
- Deposit amount earning interest
- r
- Annual interest rate
Worked examples
Minnesota: $1,500 held for two years
Minnesota pays 1% simple interest, so $1,500 earns $15 a year and $30 over 24 months, for a refund of $1,530 before deductions.
Massachusetts: $2,000 for 18 months at 5%
At 5% a year a $2,000 deposit earns $100 a year; 18 months gives $2,000 × 5% × 1.5 = $150.
Ohio: $3,000 deposit on $1,200 rent for a year
Only the $1,800 above one month’s rent earns interest in Ohio. At 5% for one year, the tenant is owed $90.
Other: 2% compounded annually for three years
Compounding 2% for three years multiplies $2,000 by 1.02³ = 1.061208, so interest is about $122.42.
Frequently asked questions
Do landlords have to pay interest on security deposits?+
Only in some places. A minority of states — including Massachusetts, Minnesota, Ohio, New Jersey, Connecticut and New Hampshire — and some cities require it, each with its own rate and conditions. Elsewhere, the landlord may keep any interest the deposit earns.
How much interest is owed on a security deposit in Massachusetts?+
Massachusetts law requires 5% a year, or the lower rate the bank actually paid on the account holding the deposit. The landlord must pay or credit it at the end of each year of the tenancy and within 30 days after the tenancy ends.
What is the security deposit interest rate in Minnesota?+
Minnesota requires simple, non-compounded interest of 1% a year, calculated from the first day of the month after the deposit is paid in full until the landlord returns it. Interest of less than $1 does not have to be paid.
When does Ohio require interest on a deposit?+
In Ohio, any part of the deposit above $50 or one month’s rent, whichever is greater, earns 5% a year — but only if the tenant stays six months or more. Interest is computed and paid annually.
Can a landlord deduct damages from the interest?+
Lawful deductions for unpaid rent or damage beyond normal wear and tear come out of the deposit balance. The interest owed is still calculated on the deposit held, and the landlord must give an itemized statement of deductions within the state deadline.
Results are general estimates and not legal advice. Laws vary by jurisdiction — consult a qualified attorney.