Security Deposit Interest Calculator
| Deposit × rate × time | Simple interest | Compounded annually |
|---|---|---|
| $1,200 at 0.5% for 12 months | $6.00 | $6.00 |
| $2,000 at 2% for 36 months | $120.00 | $122.42 |
| $1,500 at 1% for 60 months | $75.00 | $76.52 |
Use this in the weeks before move-out, when the deposit letter gets written: enter the deposit, the annual rate your state or city requires and how long the money was held. The calculator prices the interest line - simple or annually compounded - and the full refund total it belongs to.
Deposit interest is the quietest line in tenancy law: the deposit sits in someone else's account for years, and in a number of states and cities that account owes you interest, at rates that range from nominal to near-market. Whether it applies at all is local law - the math here is universal, the obligation is not.
How to use
- Enter the deposit amount and how many months you held the tenancy.
- Set the annual rate your local rule requires - the slider covers the 0-5% range most ordinances land in.
- Read the interest owed and the full refund total, then itemize the interest line separately in your move-out letter.
Frequently asked questions
Do landlords have to pay interest on security deposits?
It depends entirely on local law: a number of states and cities require it, others leave it to the lease, and the rules that do require it differ on the rate (some set a fixed percentage, some index to a savings rate annually), building size and landlord footprint. Your state attorney general's tenant handbook is the current source - then this calculator prices whatever rate applies.
How is deposit interest calculated?
Nearly every statute words it as simple interest: deposit times annual rate times years held. $2,000 at 2% for 36 months is $120.00. The annually compounded option exists for the minority of ordinances that add interest to principal each year - on the same numbers that is $122.42, a $2.42 difference.
Can the landlord deduct from the deposit and the interest?
Deductions for unpaid rent and damage beyond normal wear come off the deposit; the interest line is owed on top and itemized separately in most regimes that require it. Ordinary wear - carpet fading, nail holes - is not damage, and a move-in photo album is the evidence that keeps it that way.
When is the interest paid?
Where required, it is usually paid with the deposit refund at move-out, though some jurisdictions require annual crediting to the tenant during the tenancy. The lease should say which; if the lease is silent, the local rule wins.
What if the landlord never paid the required interest?
Remedies run from demanding the interest in writing to small-claims court, and some states attach penalties for bad-faith withholding that are larger than the interest itself. The calculation here is the clean number to put in the demand letter - cite the statute, attach the math, and keep the tone boring.