Calculate interest owed on security deposits, return deadlines, and potential penalties for late returns. For landlords and tenants in states requiring deposit interest.
Security deposits are a common requirement in rental agreements, providing landlords with financial protection against property damage or unpaid rent. However, many states have enacted laws requiring landlords to pay interest on these deposits and return them within specific timeframes.
When a tenant pays a security deposit, that money is essentially an interest-free loan to the landlord for the duration of the tenancy. Some states recognize this and require landlords to either pay interest to tenants or hold deposits in interest-bearing accounts.
Not all states require interest payments. States like California, New York, New Jersey, Massachusetts, Maryland, Illinois, Connecticut, and Washington DC have specific interest requirements. Other states may have no interest requirement but still mandate specific return deadlines and penalties for non-compliance.
Select your state to load the correct interest rate and return deadline requirements. Each state has different laws governing security deposits.
Input the security deposit amount and the dates of your lease (move-in and move-out dates). This determines the duration for interest calculation.
The calculator shows the interest owed, total amount to return, deadline date, and any potential penalties for late return based on your state's laws.
Interest = Principal x Rate x Time. For most states, this is simple annual interest calculated on a daily basis for the exact duration of the tenancy.
Rates are derived from state statutes and may be tied to benchmarks like the Federal Reserve discount rate or specified as fixed percentages. This calculator uses current 2025 rates.
Verify you receive the correct amount when your lease ends. Know your rights if your deposit is returned late or without proper itemization.
Ensure compliance with state laws. Calculate the correct interest to include with deposit returns and avoid costly penalties.
See the FAQ section for detailed answers to common questions about security deposits, interest requirements, return deadlines, and tenant rights.
See the Glossary section for definitions of important terms related to security deposits, landlord-tenant law, and interest calculations.
See the Resources section for links to state statutes, tenant rights organizations, and additional guidance on security deposit matters.
Security deposits serve as financial protection for landlords, but many states recognize that holding a tenant's money creates an obligation. This calculator helps both landlords and tenants understand their rights and responsibilities regarding security deposit interest and return requirements.
When a tenant pays a security deposit, that money essentially becomes an interest-free loan to the landlord for the entire duration of the tenancy. For long-term rentals, this can represent significant lost interest earnings for the tenant. Many states have enacted laws requiring landlords to either pay interest directly to tenants or hold deposits in interest-bearing accounts to address this inequity.
| State | Interest Required | Return Deadline | Late Penalty |
|---|---|---|---|
| California | No (local may vary) | 21 days | Bad faith: 2x deposit |
| New York | Yes (buildings 6+ units) | 14 days | Full deposit + damages |
| New Jersey | Yes (annual payment) | 30 days | 2x deposit |
| Massachusetts | Yes (5% or bank rate) | 30 days | 3x deposit |
| Maryland | Yes (3% simple) | 45 days | 3x deposit + fees |
| Illinois | Yes (Chicago: required) | 30-45 days | 2x deposit |
| Connecticut | Yes (escrow account) | 30 days | 2x deposit |
| Washington DC | Yes (current rate) | 45 days | 3x deposit |
Verify the correct amount you should receive when your lease ends, including any interest owed and the deadline by which it must be returned.
Ensure compliance with state laws by calculating the correct interest and understanding return deadlines to avoid costly penalties.
Advise clients on security deposit requirements and help resolve disputes between landlords and tenants.
Calculate potential damages in security deposit disputes and understand state-specific penalty provisions.
This calculator uses state-specific laws and current interest rates to provide accurate estimates for security deposit returns. Here's a detailed breakdown of the calculation process.
Different states have vastly different requirements for security deposits. By selecting your state, the calculator loads the correct interest rate, return deadline, and penalty provisions. If your state is not listed, it may not have mandatory interest requirements, but you should still check local ordinances as some cities have their own rules.
Input the security deposit amount and the dates of your tenancy. The calculator needs to know:
Using the state's mandated interest rate and the exact duration of the tenancy, the calculator determines the total interest owed. Most states use simple interest calculated on a daily basis:
Interest = Principal x Annual Rate x (Days / 365)
For example, a $2,000 deposit at 3% annual interest for 365 days = $2,000 x 0.03 x 1 = $60 in interest.
The calculator adds the state's required return period to the move-out date to show the deadline by which the landlord must return the deposit. Missing this deadline can trigger significant penalties.
If the current date is past the return deadline and the deposit hasn't been returned, the calculator shows the potential penalties under state law. These can range from double to triple the deposit amount, plus attorney's fees in some states.
The results panel shows:
This section explains the data sources, formulas, and assumptions used in this calculator to ensure transparency and accuracy.
Interest rates are derived from each state's statutory requirements:
This calculator uses simple interest for all states, which is the most common statutory requirement:
I = P x r x t
Return deadlines are calculated by adding the state's required return period to the move-out date. If the resulting date falls on a weekend or holiday, some states may allow the next business day, but this calculator shows the base deadline. Key deadlines by state:
Penalties for late return vary significantly by state and may depend on whether the landlord acted in bad faith:
This calculator makes several assumptions:
This calculator serves multiple purposes for different users. Here are detailed scenarios showing how it can help.
Sarah's 2-year lease in New Jersey is ending. She paid a $2,400 security deposit. Using this calculator, she determines she should receive her full deposit plus approximately $86 in accrued interest. She now knows to expect $2,486 within 30 days of moving out and can follow up appropriately if the deadline passes.
Marcus moved out of his Massachusetts apartment 45 days ago and hasn't received his $1,800 deposit. The calculator shows that the 30-day deadline has passed and he may be entitled to triple damages ($5,400) plus attorney's fees. He uses this information to send a formal demand letter.
Jennifer received her deposit back but believes the deductions were improper. The calculator helps her understand what the full amount should have been, including interest, giving her a baseline for disputing excessive or illegitimate charges.
Property manager David oversees 50 units in Maryland. When tenants move out, he uses this calculator to ensure he includes the correct 3% annual interest with each deposit return, maintaining compliance and avoiding potential triple-damage penalties.
In New Jersey, landlords must pay or credit interest annually. Landlord Patricia uses the calculator at the end of each year to determine the interest owed to each tenant, which she either pays directly or credits toward rent.
New landlord James wasn't aware of interest requirements. After a tenant complained, he used this calculator to determine what he owed retroactively and corrected his practices going forward to avoid costly litigation.
Tenant's rights attorney Linda uses this calculator to determine exact amounts for demand letters, including principal, interest, and statutory penalties for late return.
During mediation, both parties use the calculator to establish a baseline for settlement discussions, taking the guesswork out of what the tenant would be entitled to at trial.
Paralegal Tom helps tenants prepare small claims cases. The calculator provides the documentation needed to show exact amounts owed and applicable penalties under state law.
Real estate agent Michelle uses the calculator to educate first-time landlords about their security deposit obligations, helping them avoid costly mistakes.
When onboarding new properties, management company uses the calculator to audit existing deposits and ensure all accounts are compliant with state requirements.
Comprehensive answers to common questions about security deposits, interest requirements, return deadlines, and tenant rights. Click any question to expand the answer.
No, interest requirements vary by state and sometimes by locality. Only certain states mandate security deposit interest, including New York (for buildings with 6+ units), New Jersey, Massachusetts, Maryland, Illinois (Chicago), Connecticut, and Washington DC. California has no state requirement, but some cities like Los Angeles and San Francisco have local ordinances. Even in states without interest requirements, landlords must still return deposits within specified timeframes.
Return deadlines vary by state. California requires return within 21 days, New York within 14 days, New Jersey within 30 days, Massachusetts within 30 days, Maryland within 45 days, Illinois within 30-45 days depending on whether deductions are made, Connecticut within 30 days, and DC within 45 days. The deadline typically starts from the day you vacate and return keys, not from the end of your lease term.
Late return can trigger significant penalties depending on your state. Massachusetts allows triple damages plus attorney's fees. Maryland allows up to three times the deposit. New Jersey and Connecticut allow double the deposit. California allows double damages if the landlord acted in bad faith. You should first send a written demand letter, then consider small claims court or consulting an attorney if the landlord doesn't respond.
Generally, landlords can only deduct for cleaning if you left the unit dirtier than when you moved in, beyond normal wear and tear. They cannot charge for routine turnover cleaning that would be done between any tenants. Most states require landlords to provide itemized statements of any deductions. Take photos when you move in and out to document the condition and protect yourself from improper deductions.
Security deposit interest is typically calculated using simple interest: Principal x Rate x Time. For example, a $2,000 deposit at 3% annual interest for one year earns $60. The rate varies by state - some use fixed rates (like Maryland's 3%), while others tie rates to benchmarks like the Federal Reserve rate or savings account rates. Interest is usually calculated on a daily basis for the exact duration of the tenancy.
This varies by state. New Jersey requires annual payment or credit of interest to tenants. Most other states require interest to be paid at the end of the tenancy along with the deposit return. Some states allow landlords to apply interest as a credit toward rent. Check your specific state's requirements to know when you should expect to receive interest payments.
Interest rates vary by state. Maryland mandates 3% simple interest. Massachusetts requires 5% or the actual bank rate, whichever is higher. New York ties the rate to the Federal Reserve discount rate. New Jersey uses the rate set by the banking department. Connecticut uses the average savings deposit rate. The calculator uses current 2025 rates for each state. Rates may change annually based on economic conditions.
In states requiring interest, the landlord must pay the interest to the tenant regardless of whether they actually earned interest on the deposit. Some states like Connecticut require deposits to be held in specific types of accounts. The interest requirement is designed to compensate tenants for the opportunity cost of their money, not to share whatever the landlord actually earned.
Normal wear and tear includes minor scuffs on walls, faded paint, worn carpet in high-traffic areas, and small nail holes from hanging pictures. Damage includes large holes in walls, stained or burned carpet, broken fixtures, and excessive filth. The landlord can deduct for damage but not for normal wear and tear. Documentation (move-in/move-out photos) is crucial for resolving disputes about what constitutes damage.
Yes, most states require landlords to provide a written, itemized statement of any deductions from the security deposit. This must typically be sent within the same timeframe as the deposit return. Failure to provide proper itemization can result in the landlord forfeiting the right to make deductions in some states. Keep this documentation for your records in case you need to dispute the deductions.
Yes. Start by sending a written dispute letter to your landlord explaining why you believe the deductions are improper. Reference your move-in and move-out documentation. If the landlord doesn't respond satisfactorily, you can file a claim in small claims court. Many tenant disputes are resolved in small claims court without needing an attorney. Keep copies of all communications and documentation.
Generally yes, landlords can deduct unpaid rent from security deposits. However, they must still provide an itemized statement and follow all procedural requirements. They cannot deduct for rent that was disputed or for periods after you legally terminated the lease. Some states limit what can be deducted from security deposits, so check your state's specific rules.
Small claims court is often the best option for security deposit disputes. It's designed for self-representation, has low filing fees ($30-$100 typically), and can handle claims up to $5,000-$10,000 depending on the state. Before filing, send a formal demand letter giving the landlord 14-30 days to respond. Document everything - keep copies of your lease, photos, communications, and the itemized statement.
For most security deposit disputes, you don't need a lawyer. Small claims court is designed for self-representation. However, if your state allows attorney's fees recovery (like Massachusetts), a lawyer may take your case on contingency. For larger amounts or complex situations, consulting a tenant's rights attorney for a one-time consultation can be valuable. Many offer free initial consultations.
The statute of limitations varies by state and the type of claim. Most states allow 2-6 years to bring a claim for breach of contract (which includes security deposit violations). However, you should act promptly - evidence becomes harder to gather over time, and some penalty provisions may have shorter time limits. It's best to send a demand letter within 30 days of the return deadline passing.
Some states specifically allow recovery of attorney's fees in security deposit cases. Massachusetts explicitly includes reasonable attorney's fees in its penalty provision. Maryland allows attorney's fees at the court's discretion. Check your state's statute and your lease - some leases include attorney's fees provisions that can work in your favor. In small claims court, you typically don't need an attorney anyway.
Requirements vary by state. Many states require deposits to be held in separate, interest-bearing accounts at banks in that state. Massachusetts requires deposits to be held in a Massachusetts bank in a separate account. Connecticut requires escrow accounts. Some states allow commingling with proper accounting. You must typically provide tenants with the bank name, address, and account number. Failure to properly hold deposits can result in penalties.
Keep detailed records including: the signed lease showing deposit amount, receipt given to tenant, bank account information, move-in condition report with photos, move-out condition report with photos, itemized statement of deductions, copies of repair receipts or invoices, and proof of mailing for the return. Retain these records for at least as long as your state's statute of limitations (typically 3-6 years).
This depends on state law. Some states like California prohibit non-refundable deposits entirely - anything called a deposit must be refundable. Other states allow non-refundable fees for specific purposes (like pet fees or cleaning fees) if clearly labeled as "non-refundable" in the lease. The distinction between a "deposit" and a "fee" matters legally. Consult your state's landlord-tenant laws or an attorney.
If legitimate damages or unpaid rent exceed the security deposit, you can pursue the tenant for the balance. Send an itemized statement showing the deposit, deductions, and balance owed. If the tenant doesn't pay, you can sue in small claims court or civil court depending on the amount. Document everything thoroughly - you'll need to prove the damages and costs to prevail in court.
When a property is sold, the security deposit should transfer to the new owner. Most states require the old landlord to either transfer the deposit to the new owner or return it to you. You should receive written notice of the transfer. The new owner then becomes responsible for returning your deposit with interest when you move out. Get written confirmation of the deposit transfer.
If your landlord files for bankruptcy, your security deposit becomes part of the bankruptcy estate. You may need to file a claim as a creditor. If deposits were held in separate, segregated accounts as required by law, they may be protected. Consult a bankruptcy attorney for specific guidance. This is one reason why proper deposit segregation requirements exist.
Yes, security deposit laws apply regardless of the lease term. Whether you have a year lease, month-to-month tenancy, or other arrangement, the same rules for interest, return deadlines, and penalties apply. The tenancy end date for calculating interest and deadlines is when you actually vacate, not when the lease term ends.
Breaking your lease doesn't eliminate your rights to your security deposit. The landlord must still follow all deposit return procedures, interest requirements, and itemization rules. However, they may be able to deduct for re-rental costs or lost rent, depending on your state's laws and the lease terms. The landlord has a duty to mitigate damages by trying to re-rent the unit.
Understanding the terminology used in landlord-tenant law and security deposit regulations is essential for protecting your rights.
Access state-specific laws, tenant rights organizations, and additional tools to help with security deposit matters.
Cal. Civ. Code sections 1950.5 - 1950.7 govern security deposits. 21-day return deadline, limits to 2 months rent (unfurnished) or 3 months (furnished).
NY Gen. Oblig. Law section 7-103 to 7-108. 14-day return deadline. Interest required for buildings with 6+ units.
N.J.S.A. 46:8-19 to 46:8-26. 30-day return deadline. Annual interest payment required. Limit of 1.5 months rent.
M.G.L. c.186 section 15B. 30-day return deadline. 5% interest or actual bank rate required. Strict requirements with treble damages.
Md. Real Prop. Code Ann. sections 8-203 to 8-203.1. 45-day return deadline. 3% simple interest required.
765 ILCS 710 (state) and Chicago RLTO (city). 30-45 day return deadline. Chicago requires interest payment.
Conn. Gen. Stat. sections 47a-21 to 47a-22a. 30-day return deadline. Interest required at average savings rate.
D.C. Code section 42-3502.17. 45-day return deadline. Interest required at rate set by Mayor.
Many areas have free legal aid for tenants facing security deposit disputes:
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