Security Deposit Interest Calculator
If your state or city requires interest on a held security deposit, this works out exactly what is owed — simple or compounded, for any rate and any length of tenancy.
Interest owed
$0.00
Total to return
$0.00
Years held
0
Assumes a constant rate for the whole period. Where your jurisdiction resets the rate annually, calculate each year at its own rate and add the results.
The Formula
Simple: interest = deposit × rate × years
Compounded: interest = deposit × ((1 + rate)years − 1)
Over short tenancies the two barely differ. Over a long one they diverge meaningfully — on a $1,500 deposit at 1.5% held ten years, simple interest gives $225 while annual compounding gives about $241. Use whichever method your jurisdiction specifies.
Where Interest Is Required
Most states do not require interest on security deposits. A minority do, and several major cities impose their own rules that can be stricter than the surrounding state's. States that have had interest requirements include:
City ordinances matter too — Chicago, San Francisco, and Seattle among others have their own requirements. And the obligation is often conditional rather than universal, turning on:
- Building size — some rules apply only above a unit-count threshold, exempting small landlords.
- Tenancy length — interest may start only after a year or two.
- Deposit size — a threshold amount can trigger the requirement.
Because the list and the rates change, treat the above as a prompt to check rather than an answer. Our security deposit guide covers the wider rules on limits, deductions, and return deadlines.
The Rules That Usually Travel With It
Where interest is required, these obligations commonly come attached — and they carry the heavier penalties:
- Separate account. Hold the deposit in a dedicated escrow or trust account, often at an in-state institution.
- No commingling. Never mix deposits with operating funds. In some states commingling alone forfeits your right to withhold anything.
- Written notice. Many states require telling the tenant where the deposit is held, within a set window after move-in.
- An itemized statement at move-out, with the interest shown separately. See the security deposit return letter template.
Why a Small Amount Deserves Attention
The interest itself is usually tens of dollars. The penalty for skipping it often is not: statutory damages of two or three times the deposit, loss of the right to deduct for actual damage, and the tenant's legal fees. The arithmetic is simple and the bank records document it either way, which makes this one of the easiest claims for a tenant to prove and one of the cheapest obligations for a landlord to satisfy.
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Deposits, Documented
Kelpic records what you hold, when you received it, and what you returned — so a deposit dispute is settled by your records instead of your memory.
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