Rental Deposit Interest Calculator
When a landlord holds your security deposit in an interest-bearing account, the interest belongs to you at the end of the lease in many jurisdictions. The catch is that the method changes by place: most US states that require interest use simple interest, while some other systems credit it monthly and compound it. This calculator runs both methods on the same deposit, rate and period, so you can match the figure your lease or local law actually specifies.
| Year | Interest that year | Balance |
|---|
Quick Answer
A $2,000 security deposit held for 36 months at 2% simple interest earns $120.00, so $2,120.00 is due back in total. Run the same deposit under monthly compounding at 5.5% for 24 months instead and the interest is $232.00, which is why picking the method your lease specifies matters more than the rate alone.
Key takeaways
- The method comes from your lease or local law, not from preference: simple interest in most US states that require it, monthly compounding in systems such as South Africa's.
- Lease dates convert to whole months only. A partial final month adds nothing, so check the count before you rely on it.
- Interest is figured on the deposit held. Lawful deductions for damage or unpaid rent come off the refund afterwards and do not change the interest math.
- Small-print thresholds can wipe out a small claim: Minnesota drops interest amounts under $1, and Maryland pays nothing on deposits under $50 or held under 6 months.
- Quick Answer
- How to use this rental deposit interest calculator
- The two interest formulas, side by side
- Worked example: a $2,000 deposit over a three-year lease
- Which rate and method does your area use?
- What competing calculators miss
- Deductions, minimum holding periods and other fine print
- Frequently asked questions
- Add This Calculator to Your Website
- References
How to use this rental deposit interest calculator
Pick the method first, then enter the deposit, the annual rate and the holding period. The result shows the interest owed, the total due back and the exact formula with your numbers filled in.
- Choose Simple interest or Compound monthly. Use whichever your lease or statute names. Switching methods hides the previous result, so re-check the tab before you calculate.
- Enter the deposit amount exactly as it appears on the lease or receipt, before any deductions.
- Enter the annual interest rate from the lease, or the statutory rate for your area (the rate guide below covers the common ones).
- Set the period. Type the months directly, or enter both lease dates and let the tool count the whole months between them.
- Press Calculate. In compound mode with a period of 12 months or more, you also get a year-by-year growth table showing the interest credited each year and the running balance.
If you are still working out the deposit itself rather than the interest on it, the move-in cost side is a separate job: a rent deposit calculator totals the deposit, first month and fees due at signing.
The two interest formulas, side by side
Simple interest pays the same amount every year because it is always figured on the original deposit. Compound monthly interest is figured on a balance that grows each month, so each month's interest is slightly larger than the last.
Simple interest: Interest = Deposit x (Rate / 100) x (Months / 12). A $2,000 deposit at 2% for 36 months earns $2,000 x 0.02 x 3 = $120.00, so $2,120.00 comes back.
Compound monthly: Total = Deposit x (1 + Rate / 12)Months, and interest is the total minus the deposit. A $10,000 deposit at 5.5% compounded monthly for 24 months grows to $10,000 x (1 + 0.055 / 12)24 = $11,159.98, which is $1,159.98 in interest. Two quirks of this mode are worth knowing: fractional months are rounded to the nearest whole month before compounding (24.6 months calculates as 25), and the year-by-year table only appears at 12 months or more.
Worked example: a $2,000 deposit over a three-year lease
A tenant pays a $2,000 security deposit, the lease runs 3 years (36 months), and the applicable rate is 2% simple interest. Here is the full run, in the order the calculator does it:
36 months / 12 = 3 years
$2,000 x 0.02 x 3 = $120.00
$2,000.00 + $120.00 = $2,120.00
Enter 2000, 2 and 36 on the Simple interest tab and you get exactly $120.00. The gap between methods widens with the rate and the term, as this comparison of the same $2,000 deposit shows:
Bar lengths are proportional to the interest earned. All four figures reproduce exactly in the calculator above.
Which rate and method does your area use?
There is no single national rule, so the honest answer is to enter the rate your lease states, and fall back on the statutory rate where you live. The table below covers the rules readers ask about most; every entry is the published rule of that jurisdiction, not an average.
| Jurisdiction | Method | Rate and conditions |
|---|---|---|
| Minnesota | Simple | 1% per year by statute; amounts under $1 are excluded |
| Maryland | Simple | 1.5% or the daily US Treasury yield rate, whichever is greater; deposits of $50 or more held at least 6 months |
| Massachusetts | Bank account rate | Deposit must sit in a separate interest-bearing account; interest is paid at the rate the bank pays |
| Connecticut | Simple | Rate set each year by the Banking Commissioner and published by the Department of Banking |
| Boulder, Colorado | Simple, monthly proration | City formula rate is 2.08% for 2026, based on average one-year CD rates |
| Alberta, Canada | Annual, published rate | Province publishes the rate each year; it is 0% for 2026 |
| British Columbia, Canada | Compounded annually | Prime rate minus 4.5%, set each January 1; 0% for 2026 |
| South Africa | Compound monthly (this tool) | Rental Housing Act requires an interest-bearing account; interest is paid to the tenant at the account rate |
The Minnesota rule is a good template for how specific these laws get: under Minnesota Statutes section 504B.178, deposits bear simple, non-compounded interest at 1% per year, counted from the first day of the month after the deposit was paid in full. Maryland's rule, in Real Property section 8-203, ties the rate to Treasury yields instead. Massachusetts goes further and requires the deposit to sit in a separate interest-bearing account under General Laws chapter 186, section 15B. If your area is not in the table, your lease is the next place to look, and a local tenant advisory service can confirm the current rate.
What competing calculators miss
Most deposit interest tools force you into one camp. City and provincial tools, such as the Berkeley and Alberta calculators, hard-wire a single local rate and method, which is precise if you live there and useless if you do not. Generic interest calculators go the other way and offer compounding frequencies with no tenancy context at all.
This page combines both methods in one tool, converts lease dates to months for you, and shows the year-by-year growth under compounding so you can check the figure a landlord hands you line by line. It also states the limits plainly: the tool applies one rate across the whole period, so if your statutory rate changed mid-lease, run each rate period separately and add the results. For a deposit that stays in a savings-style account rather than a tenancy, the daily growth view is covered by the daily compound calculator, and a single day's interest by the daily interest calculator.
Deductions, minimum holding periods and other fine print
The interest figure is only one part of the refund. Three pieces of fine print decide how much of it you actually see.
Deductions come after interest. The calculator figures interest on the full deposit held. If the landlord lawfully deducts for damage beyond normal wear and tear or for unpaid rent, that reduces the amount returned, but it does not retroactively change the interest the deposit earned while it was held. Keep the move-in and move-out condition reports; they are the evidence in any deduction dispute.
Minimum holding periods can zero out a short tenancy. Maryland pays no interest unless the deposit was held at least 6 months and is $50 or more. Minnesota starts the clock on the first day of the month after full payment, so a deposit paid mid-month earns nothing for that partial month. Rules like these are why a correct rate can still produce a $0 answer.
A rate change mid-lease needs two runs. Jurisdictions that reset their rate every January (Alberta and British Columbia both do) can leave a long tenancy spanning two or three different rates. Run the months at each rate separately in simple mode and add the interest figures; the total due back is the deposit plus the sum.
Frequently asked questions
It depends on the jurisdiction. Some US states, for example Maryland and Massachusetts, require it under specific conditions; others do not. South Africa's Rental Housing Act requires landlords to invest the deposit in an interest-bearing account and pay the tenant the interest. Check your state or country's tenancy law, or ask a local tenant advisory service.
Use whichever your lease or local statute specifies. Most US state formulas are simple interest on the deposit. South African practice credits interest monthly at the savings account rate, which is the compound monthly mode here. When in doubt, simple interest is the conservative, widely accepted default.
The rate in your lease if one is stated; otherwise the statutory rate for your area. Minnesota sets 1% simple interest by statute, and Maryland uses 1.5% or the daily US Treasury yield rate, whichever is greater, for deposits held at least 6 months. Never guess a high rate to inflate the figure.
Sometimes. Maryland pays no interest unless the landlord has held the deposit at least 6 months, and only on deposits of $50 or more. Minnesota starts counting from the first day of the month after the deposit was paid in full and excludes interest amounts under $1. Your jurisdiction may have similar thresholds.
Interest is computed on the deposit held, so deductions do not change the interest figure. Lawful deductions for damages or unpaid rent reduce the refund itself, and any dispute over deductions is separate from the interest math. Keep the move-in and move-out condition reports.
Yes. Enter any number of months: 18 months works the same as 36 in simple mode. In compound mode, fractional months are rounded to the nearest whole month before the calculation. If you use the lease dates, the calculator counts whole months between them and drops a partial final month.
It counts whole calendar months between the two dates. If the end day of the month is earlier than the start day, the final partial month is not counted, so January 15 to March 10 counts as 1 month, not 2. If the end date is not after the start date, the Period field is left unchanged and you can type the months yourself.
Run the calculation once for each rate period and add the interest amounts. The tool applies a single rate across the whole period you enter, which matches most leases; jurisdictions that reset their rate each January, such as Alberta, can span two rates in one long tenancy.
Add This Calculator to Your Website
Embed this calculator on your own site with the code below. Pick a size to preview it live, then copy the code.
Powered by Calculator Zilo
References
- Minnesota Office of the Revisor of Statutes. Minnesota Statutes section 504B.178, Interest on Security Deposits (simple interest at 1% per year, counted from the first day of the month after full payment; amounts under $1 excluded). Accessed October 24, 2026.
- Maryland General Assembly, text via Justia. Maryland Code, Real Property section 8-203, Security deposits (interest at 1.5% or the daily US Treasury yield rate, whichever is greater; $50 minimum deposit and 6-month holding conditions). Accessed October 24, 2026.
- Massachusetts General Court. General Laws Part II, Title I, Chapter 186, Section 15B (security deposits must be held in a separate interest-bearing account, with interest paid to the tenant). Accessed October 24, 2026.
- Connecticut Department of Banking. Security Deposit Interest Rates (annual rates set by the Banking Commissioner for deposits held by landlords). Accessed October 24, 2026.
- City of Boulder, Colorado. Interest on Security Deposits Calculation Formula (city formula and monthly proration; 2.08% rate for 2026 based on average one-year CD rates). Accessed October 24, 2026.
- City of Berkeley Rent Stabilization Board. Security Deposit Interest and Calculator (annual and move-out interest payments, November to October interest year, 10% penalty rate for late annual payment). Accessed October 24, 2026.
- Government of Alberta. Annual Security Deposit Interest Rate (published minimum rate landlords must pay, worked examples, and the rate history including 0% for 2026). Accessed October 24, 2026.
- Service Alberta and Red Tape Reduction. Security Deposit Interest Calculator (official calculator applying the prescribed annual rates to a deposit and tenancy period). Accessed October 24, 2026.
- Government of South Africa. Rental Housing Act 50 of 1999 (deposit must be invested in an interest-bearing account and the interest paid to the tenant). Accessed October 24, 2026.
- Tenant Resource and Advisory Centre (British Columbia). Deposits (interest at 4.5% below the prime rate, compounded annually; 0% for 2026; return deadlines and the double-deposit remedy). Accessed October 24, 2026.