Does my landlord have to pay interest on my security deposit?
It depends on your state and city. Some jurisdictions require landlords to hold deposits in interest-bearing accounts and pay you the interest. Others have no such requirement.
Whether your landlord owes you interest on your security deposit depends entirely on where you live. Some states and cities mandate interest-bearing accounts, while others let landlords pocket the interest or don't address it at all.
In cities like Chicago, New York, and parts of New Jersey, landlords must deposit your money in a separate interest-bearing account and pay you that interest — usually annually or at move-out. If they don't, you may be entitled to penalties.
Even in states that don't require interest, your landlord may still need to keep your deposit in a separate account (not mixed with their personal funds). This is called "commingling" and it's prohibited in many jurisdictions. If your landlord mixed your deposit with their operating funds, that alone might give you a claim.
How This Works State by State
The rules vary depending on where you live. Here's how the biggest states handle it.
California has no statewide deposit interest requirement, but cities like San Francisco and Los Angeles mandate annual interest payments under local ordinances.
Texas has no requirement for landlords to pay interest on security deposits or maintain separate deposit accounts under Tex. Prop. Code Chapter 92.
New York landlords of 6+ unit buildings must hold deposits in interest-bearing accounts under N.Y. Gen. Oblig. Law § 7-103(2-a), paying tenants the interest minus 1%.
Under Fla. Stat. § 83.49(1), Florida landlords choosing interest-bearing accounts must pay tenants at least 75% of the annualized average interest rate.
Under Chicago RLTO § 5-12-080(c), landlords must pay interest on deposits held over 6 months at a rate set annually by the city comptroller.
| State | Rule | Statute |
|---|---|---|
| California | California does not require landlords to pay interest on security deposits statewide, though some cities (like San Francisco, Los Angeles, and Berkeley) have local ordinances requiring it. | Cal. Civ. Code § 1950.5 |
| Texas | Texas does not require landlords to pay interest on security deposits or hold them in separate accounts. | Tex. Prop. Code § 92.103 |
| New York | New York requires landlords to hold deposits in interest-bearing accounts for buildings with 6+ units. Tenants earn the interest minus a 1% administrative fee. | N.Y. Gen. Oblig. Law § 7-103(2-a) |
| Florida | Florida landlords can choose between three options: a non-interest-bearing account (notify tenant within 30 days), an interest-bearing account (pay at least 75% of annualized average interest), or a surety bond. | Fla. Stat. § 83.49(1) |
| Illinois | Chicago requires interest on deposits held more than 6 months. The rate is set annually by the city comptroller. Failure to pay interest is a violation of the RLTO. | Chicago RLTO § 5-12-080(c) |
●Frequently Asked Questions
Frequently Asked Questions
Does my landlord have to pay interest on my security deposit?
It depends on your state and city. Some jurisdictions require landlords to hold deposits in interest-bearing accounts and pay you the interest. Others have no such requirement.
Can my landlord charge me for carpet replacement?
Your landlord can only charge you for carpet damage beyond normal wear and tear. Worn paths, minor stains from regular use, and fading are normal wear — not your responsibility. Large burns, pet damage, or deep stains from negligence are deductible.
Can my landlord charge me for painting after I move out?
Generally no — repainting between tenants is considered routine maintenance, not tenant damage. Landlords can only charge you for painting if you caused damage beyond normal wear, like crayon drawings, smoke staining, or unauthorized bold paint colors.
Can my landlord keep my deposit for cleaning?
Your landlord can deduct cleaning costs only if you left the unit dirtier than when you moved in, beyond normal wear. They cannot charge for routine turnover cleaning that happens between every tenant.
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DepositHawk is not a law firm and does not provide legal advice. Information and documents are for informational purposes only. No attorney-client relationship is created. Consult a licensed attorney for advice specific to your situation.