14 States Owe You Interest on Your Security Deposit, and Most Renters Never Collect It

Your landlord is holding a chunk of your money, often more than a thousand dollars, for the entire length of your tenancy. In much of the country that money simply sits there. But in a group of states, the law treats your security deposit as your money that the landlord is merely safeguarding, and it requires the landlord to pay you interest on it. When we reviewed all 50 states and DC, we found 14 states plus DC that mandate this. Most tenants in those places never see a cent of it, because nobody tells them it exists.

The 14 states plus DC that require interest

The jurisdictions that require a landlord to pay the tenant interest on the deposit are Connecticut, the District of Columbia, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, and Pennsylvania. If you rent in any of these, the interest your deposit earns is not a bonus your landlord gets to keep. It is yours, and the obligation to pay it is written into law.

The reasoning is straightforward once you say it out loud. The deposit never stopped being your money. You are getting it back at the end of the lease minus any lawful deductions. While the landlord holds it, in these jurisdictions the law says the earnings on your money belong to you.

Why almost nobody collects it

The amounts are small enough per month that they slip beneath everyone's attention and large enough over a full tenancy to matter. A deposit of fifteen hundred dollars held for three years can accumulate a meaningful sum in interest. But the payment is rarely automatic in practice. Tenants do not know the right exists, do not know the rate, and do not know they can ask. So the money quietly stays where it is.

There is also a timing problem. Interest often comes due annually or at the end of the tenancy, exactly the moment when a tenant is busy moving, chasing the return of the deposit itself, and least likely to audit a separate line for interest. The right is real. The follow through is where it collapses.

How the interest usually works

The mechanics vary by jurisdiction, but the shape is consistent. The landlord holds the deposit, frequently in a separate or designated account. Interest accrues over the tenancy at a rate the jurisdiction sets or ties to a benchmark. It is then paid to the tenant either once a year, credited toward rent, or handed over when the deposit is returned at move out. Because the details differ from place to place, the specific rate and schedule are set by your own jurisdiction's rules rather than by a single national standard.

None of this changes the size of the deposit itself, which is a separate question with its own limits. If you also want to know whether your deposit amount is even within your state's legal ceiling, our security deposit limit checker covers that side of the equation.

How to actually claim what you are owed

Start by confirming you rent in one of the jurisdictions above, then look at your lease. Many leases in these states already describe how deposit interest is handled, because the landlord is required to comply. Keep a simple record: the deposit amount, the date you paid it, and the date your tenancy began. Those three facts are all you need to check whether the interest you have received matches what accrued.

If you have received nothing and your tenancy has run long enough for interest to be due, raise it in writing with your landlord and ask for an accounting. Put the request in an email so there is a dated record. Most of the time this is not a dispute at all. It is a line item that was simply never processed, and asking is what triggers it.

Put it in the lease from the start

The cleanest fix happens before you ever move in. When you sign a residential lease in one of these states, make sure it spells out how deposit interest is handled: where the deposit is held, how interest accrues, and when it is paid to you. A lease that names the mechanism turns an obscure statutory right into a plain contractual term you can point to later without any argument about whether it applies.

Do not stop at the interest

Interest is one of several deposit protections that tend to travel together in these jurisdictions, and it is worth checking the rest while you are looking. Many of the same states that require interest also require the landlord to hold the deposit in a separate account, to tell you where it is held, and to return it within a set number of days after you leave. Reading the whole deposit section of your state's rules, rather than just the interest line, often surfaces two or three obligations your landlord owes you that are just as easy to overlook. The interest is the money left on the table most often, but it is rarely the only thing.

The habit that pays off here is simple record keeping across the whole tenancy. If you keep a single note with your deposit amount, the account it sits in when disclosed, the interest payments you have received, and the dates of each, you are ready to verify everything at once when you move out. That is the moment a landlord is most likely to make an honest mistake on the accounting, and a tenant with clean records is the one who catches it.

The bottom line

In 14 states plus DC, interest on your security deposit is money the law already says is yours. The obstacle is not the statute. It is that the payment rarely happens on its own and almost no tenant knows to ask. Check whether you rent in one of these jurisdictions, keep the three facts that let you verify what you are owed, and ask for it in writing. It is one of the few pieces of renting where the money is genuinely sitting there waiting to be claimed.

Sources

• HUD: Rental Assistance and Tenant Rights