Security Deposit Interest Calculator
Calculate the interest a landlord owes on a security deposit — simple or compounded — and the total you should get back.
How it works
Simple: interest = deposit × rate × years · Compounded annually: interest = deposit × ((1 + rate)^years − 1) · Total = deposit + interest
Many states and cities require landlords to hold security deposits in an interest-bearing account and pay that interest to the tenant, either annually or at move-out. The rate is often set by law or tied to a bank index and can be small. Use simple interest for a flat statutory rate or annual compounding where the rules reinvest each year's interest.
Worked example
A $1,500 deposit held for 2 years at 1.5% simple interest earns 1,500 × 0.015 × 2 = $45, so the landlord returns $1,545. Compounded annually it is 1,500 × (1.015² − 1) = $45.34 — a few cents more because year two earns interest on year one's interest.
Frequently asked questions
Do all landlords owe interest on deposits?
No — it depends on where you live. Some states and cities (and certain large buildings) require it; many places do not. Check your local landlord-tenant law for the required rate and whether it is paid annually or at move-out.
What rate should I use?
Where interest is required, the rate is usually set by statute or pegged to a published bank or treasury index and updated periodically. Enter the rate your jurisdiction specifies for the years the deposit was held.
Simple or compound interest?
Follow your local rule. Many statutes use simple interest at a flat annual rate; some compound annually. The difference is tiny at low rates over a few years, as the example shows.
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Educational estimate, not financial advice.