Security Deposit Interest by State (2026)
Which states make landlords pay interest on a tenant's security deposit, and which ones say where you must keep the money, for 49 states and D.C. Each row links the statute and our full state page.
Beginner tip: a security deposit is still the tenant's money while you hold it. Even where no interest is owed, don't spend it or mix it into your operating account without checking your state's rule.
General info, not legal advice. Verify the statute or ask a local attorney. Details
The short answer
Most states don't require interest. 14 of the 50 places below have a statute that makes the landlord pay interest to the tenant in at least some cases, such as Connecticut, Maryland, Massachusetts, Minnesota, New Jersey and Ohio. Some only apply above a size or time limit: New York at 6 or more units, Illinois at 25 or more units, Ohio once the tenant stays 6 months, and New Hampshire once you've held the deposit a year.
Another 12 set rules on where the deposit must be held (an escrow or trust account, or a bond) without paying the tenant interest. The other 24 have no statewide interest or separate-account rule, although some cities do. Every row comes from our state landlord-law page, which cites the official statute. On Nov 10, 2026 we re-checked the official text for 15 states, marked in the table.
Deposit interest and holding rules by state
| State | Interest and where to hold the deposit |
|---|---|
| Alabama Ala. Code ch. 35-9A · From our state page | No interest owed and no separate account required. No statute |
| Alaska AS 34.03.070(c) · From our state page | No interest owed. Keep deposits in a trust account at a bank, savings and loan or licensed escrow agent where practicable, separate from your money. Account rule, no tenant interest |
| Arizona A.R.S. § 33-1321 · From our state page | No interest owed and no separate account required. No statute |
| Arkansas Ark. Code §§ 18-16-301 to 18-16-306 · From our state page | No interest owed and no separate account required. No statute |
| California Cal. Civ. Code § 1950.5(d) · From our state page | No state interest or separate-account rule. The deposit is held for the tenant. Some cities require interest. No statute |
| Colorado C.R.S. 38-12-101 to 38-12-106 · From our state page | No interest owed and no separate account required. No statute |
| Connecticut Conn. Gen. Stat. § 47a-21(h)–(i) · Re-checked Nov 10, 2026 | Pay interest at no less than the state deposit index each year (on the tenancy anniversary or as a rent credit). Escrow account at a Connecticut bank; written notice within 30 days. Interest owed to tenant |
| Delaware 25 Del. C. § 5514(b), (g)(2) · Re-checked Nov 10, 2026 | No interest owed. Keep deposits in a designated escrow account at a federally insured bank with a Delaware office, and tell the tenant where it is. Account rule, no tenant interest |
| District of Columbia 14 DCMR §§ 308.3, 308.6–308.7, 311.1–311.2 · From our state page | Interest-bearing escrow account at a D.C. bank. Interest at the bank's passbook rate is owed to tenants whose tenancy lasted 12 months or more. Interest owed to tenant |
| Florida Fla. Stat. § 83.49(1) · Re-checked Nov 10, 2026 | Separate Florida bank account or a surety bond. Interest-bearing account: tenant gets 75% of the interest or 5% a year (your choice). Bond: 5% a year. Non-interest account: none. Interest owed to tenant |
| Georgia O.C.G.A. §§ 44-7-31, 44-7-32, 44-7-36 · From our state page | No interest owed. Separate escrow account at a regulated bank (tell the tenant where), or a surety bond. Small landlords with 10 or fewer units are exempt. Account rule, no tenant interest |
| Hawaii HRS § 521-44(b) · From our state page | No interest owed. The deposit may be commingled, but it is held for the tenant. No statute |
| Idaho Idaho Code § 6-321(4) · From our state page | No interest owed. Only a third-party manager must use a separate account at a federally insured institution. Account rule, no tenant interest |
| Illinois 765 ILCS 715/1–2 · From our state page | Buildings or complexes with 25+ units: pay interest on deposits held over 6 months, at the passbook rate set by statute. Chicago has its own rules. Interest owed to tenant |
| Indiana IC 32-31-3 · From our state page | No interest owed and no separate account required. No statute |
| Iowa Iowa Code § 562A.12(2) · From our state page | Hold deposits in a federally insured bank or credit union, not mixed with your money. Interest earned in the first 5 years of a tenancy belongs to the landlord. Account rule, no tenant interest |
| Kansas K.S.A. 58-2540 et seq. · From our state page | No interest owed and no separate account required. No statute |
| Kentucky KRS 383.580(1) · From our state page | No interest owed. Use a separate deposit-only account at a regulated bank and tell tenants where it is and the account number. Account rule, no tenant interest |
| Louisiana La. R.S. 9:3251 · From our state page | No interest owed and no separate account required. No statute |
| Maine 14 M.R.S. § 6038 · From our state page | No interest owed. Keep deposits in a bank account, separate from your assets and out of reach of your creditors. Account rule, no tenant interest |
| Maryland Md. Code, Real Prop. § 8-203(d)–(e) · Re-checked Nov 10, 2026 | Interest on deposits of $50 or more held 6 months: the 1-year Treasury rate or 1.5% a year, whichever is greater. Separate account at a Maryland branch within 30 days. Interest owed to tenant |
| Massachusetts M.G.L. c. 186, § 15B(2)–(3) · Re-checked Nov 10, 2026 | Separate interest-bearing Massachusetts bank account. Pay 5% a year (or the lower rate the bank paid) every year. Interest also applies to last month's rent paid in advance. Interest owed to tenant |
| Michigan MCL 554.604, 554.605 · From our state page | No interest owed. Keep the deposit in a regulated financial institution, unless you file a cash or surety bond with the Secretary of State. Account rule, no tenant interest |
| Minnesota Minn. Stat. § 504B.178, subd. 2 · Re-checked Nov 10, 2026 | 1% simple interest a year, from the first day of the month after the deposit is paid in full. No separate-account rule. Interest owed to tenant |
| Mississippi Miss. Code § 89-8-21(2) · From our state page | No interest owed and no separate account required. The tenant's claim comes before your creditors. No statute |
| Missouri RSMo § 535.300.2 · Re-checked Nov 10, 2026 | Hold deposits in a federally insured bank, credit union or depository institution. Any interest earned belongs to the landlord. Account rule, no tenant interest |
| Montana MCA 70-25-101 et seq. · From our state page | No interest owed and no separate account required. No statute |
| Nebraska Neb. Rev. Stat. §§ 76-1401 to 76-1449 · From our state page | No interest owed and no separate account required. No statute |
| Nevada NRS ch. 118A · From our state page | No interest owed and no separate account required. No statute |
| New Hampshire RSA 540-A:6, I(b)–(c), II, IV · Re-checked Nov 10, 2026 | Hold in trust (pooled New Hampshire account or a bond). If you hold a deposit for 1 year or more, pay interest at the account's savings rate. Interest owed to tenant |
| New Jersey N.J.S.A. 46:8-19 · From our state page | Interest-bearing account at a New Jersey bank (special account types for 10+ units). Pay or credit the interest every year and give written notice of the bank and rate. Interest owed to tenant |
| New Mexico NMSA 1978 § 47-8-18(A)(1) · From our state page | If a deposit on an annual lease is more than 1 month's rent, pay yearly interest at the statutory passbook rate. Interest owed to tenant |
| New York N.Y. Gen. Oblig. Law § 7-103(1), (2), (2-a) · Re-checked Nov 10, 2026 | Never mix deposits with your money. Buildings with 6+ units: interest-bearing New York account; you may keep 1% a year as an admin fee, and the rest of the interest goes to the tenant. Interest owed to tenant |
| North Carolina N.C. Gen. Stat. § 42-50 · Re-checked Nov 10, 2026 | No interest owed. Trust account at a licensed, federally insured bank or a bond. Tell the tenant where it's held within 30 days. Account rule, no tenant interest |
| North Dakota N.D.C.C. § 47-16-07.1(1), (3) · Re-checked Nov 10, 2026 | Federally insured, interest-bearing account. Return the deposit with interest, unless the tenant stayed less than 9 months. Interest owed to tenant |
| Ohio Ohio Rev. Code § 5321.16(A) · Re-checked Nov 10, 2026 | If the tenant stays 6 months or more: 5% a year on the part of the deposit above $50 or one month's rent, whichever is greater, paid every year. Interest owed to tenant |
| Oklahoma 41 O.S. § 115(A)–(B) · Re-checked Nov 10, 2026 | Escrow account at a federally insured institution in Oklahoma. The deposit is returned without interest. Account rule, no tenant interest |
| Oregon ORS 90.300(2) · From our state page | No interest owed and no separate account required. Give a receipt and hold the deposit for the tenant. No statute |
| Pennsylvania Landlord and Tenant Act §§ 511.2, 511.3 · From our state page | After the second year, deposits over $100 go in escrow. In an interest-bearing account you keep 1% a year, and the rest of the interest goes to the tenant each year. Interest owed to tenant |
| Rhode Island R.I. Gen. Laws ch. 34-18 · From our state page | No interest owed and no separate account required. No statute |
| South Carolina S.C. Code ch. 27-40 · From our state page | No interest owed and no separate account required. No statute |
| South Dakota SDCL ch. 43-32 · From our state page | No interest owed and no separate account required. No statute |
| Texas Tex. Prop. Code § 92.103(c) · From our state page | No interest owed and no separate account required. The tenant's claim comes before your other creditors. No statute |
| Utah Utah Code ch. 57-17 · From our state page | No interest owed and no separate account required. No statute |
| Vermont 9 V.S.A. § 4461(g) · From our state page | No state interest or separate-account rule. Town ordinances can require interest. No statute |
| Virginia Va. Code §§ 55.1-1226, 55.1-1205 · From our state page | No interest owed and no separate deposit account required. Keep itemized records for each tenant. No statute |
| Washington RCW 59.18.270 · Re-checked Nov 10, 2026 | Trust account at a Washington financial institution or licensed escrow agent. Unless you agree otherwise in writing, the landlord keeps the interest. Account rule, no tenant interest |
| West Virginia W. Va. Code § 37-6A-3 · From our state page | No interest owed and no separate account required. No statute |
| Wisconsin Wis. Stat. ch. 704 · From our state page | No interest owed and no separate account required. No statute |
| Wyoming Wyo. Stat. § 1-21-1208(a) · Re-checked Nov 10, 2026 | No interest owed: the statute says the balance is returned without interest. No separate account required. No statute |
Tennessee is not listed. Our Tennessee page is still being verified, so check Tennessee's official code before you act. Cities can add their own rules. For example, Chicago has its own interest rules, and some California cities require interest (our California page lists cities to check).
Rates that change every year
Some states tie the rate to a number that's reset each year, such as Connecticut's deposit index, Maryland's 1-year Treasury rate (with a 1.5% floor), D.C.'s bank passbook rate and Illinois's passbook rate. We don't list this year's figure for those states. Look it up on the official state source in the table before you calculate what you owe.
Simple habits that keep you safe
- Open a separate account just for deposits, even where it isn't required. It makes the move-out accounting easy.
- Give the tenant a written receipt that says the amount and, where required, the bank's name and address.
- Put a yearly reminder on your calendar to pay or credit interest in states that require it.
- When you sell a rental, transfer the deposits (plus any interest owed) to the buyer and tell the tenants in writing.
- Return the deposit and any interest by your state's deadline, with an itemized list of deductions.
Related tools and pages
Security deposit limits by state · Landlord laws by state · Rent control by state · Rent increase notice by state · Eviction notice periods by state · Move-in / move-out inspection checklist
General information only. Not legal advice. RentToolkit is not a law firm. Laws and local ordinances change, so check the official source and talk to a licensed attorney before acting.
General information only. Not legal advice. RentToolkit is not a law firm. Laws and local ordinances change, so check the official source and talk to a licensed Florida attorney before acting.