Are landlords required to keep security deposits in interest-bearing accounts?

Many states require landlords to keep tenant security deposits in interest-bearing accounts. Often the rules include requirements for notifying tenants of the location of such accounts and related details. Below you will find a regularly updated table indicating whether landlords are required to maintain tenant security deposits in interest-bearing accounts for all 50 states.


Security Deposits in Interest-Bearing Accounts
State-by-State Requirements
AlabamaNot required
AlaskaNot required. However, use of an interest-bearing account is advisable if the security deposit is placed into a trust account. Always specify in the lease (AS 34.03.070(c)).
ArizonaNot required
Arkansas
Not required
California
Not required
Colorado
Not required
Connecticut
Security deposits must be deposited into an escrow account generating interest. Interest must be paid or credited to tenants annually at a rate at least equal to the average commercial bank's savings deposit rate (as determined by the Banking Commissioner here). The interest is forfeited if the tenant is delinquent on rent for 10+ days (unless the late fee is paid) (Conn gen statute 47a-21(h)).  
Delaware
Security deposits must be placed in an escrow bank account in a federally-insured banking institute in the United States. Landlords must disclose the location of the security deposit account (25 Delaware Code S. 5514(b)). 
District of Columbia
Security deposits must be placed into interest-bearing escrow accounts in D.C. and be federally or state insured (DC Municipal Regulations Chapter 14 S.308.3). Landlords must post or disclose in writing, at the end of the calendar year, where security deposits are held and the prevailing rate for each six-month period over the past year. At the end of a tenant’s tenancy, the landlord must list for the tenant the interest rate for each six-month period during the tenancy (DC Mun. Reg. Ch. 14 S.308.7).
Florida
Interest-bearing accounts are allowed but not required. Commingling of funds is prohibited (Fla. Stat. Ann. § 83.49(1)(a) & (b)). Landlords must disclose the name and address or the location of the depository, interest or non-interest bearing status, and the interest rate, if any. It is advisable to add disclosure language according to (Fla. Stat. Ann § 83.49(2)(d)).
Georgia
Nonrefundable fees are allowed, but not nonrefundable security deposits (O.C.G.A. § 44-7-30). If an owner owns more than 10 rental units or management, including rent collection, is performed by third persons, natural or otherwise, for a fee (O.C.G.A. § 44-7-36), then the Security Deposit must be kept in an escrow account established only for that purpose and the location must be disclosed to the tenant. If an owner owns 10 or fewer rental units, the landlord does not need to deposit in an escrow account (O.C.G.A. § 44-7-31).
Hawaii
Not required
Idaho
It is advisable to keep deposits in interest-bearing accounts, though it is not required. The lease should include the amount of the security deposit, the name of the financial institution where it will be held in escrow, and an explanation of how the landlord will use it at the end of the tenancy (Attorney General Handbook (pg. 6 & 25)).
Illinois
Landlords with 25 units or more must keep security deposits in interest-bearing accounts. Interest must be paid to tenants at a rate equal to the minimum passbook savings account interest rate paid by the largest Illinois commercial bank as of December 31 of the year prior to the beginning of the lease (765 ILCS 715/1). The lessor shall, within 30 days after the end of each 12-month rental period, pay to the lessee any interest that has accumulated to an amount of $5 or more, by cash or credit to be applied to rent due, except when the lessee is in default under the terms of the lease. The lessor shall pay all interest that has accumulated and remains unpaid, regardless of the amount, upon termination of the tenancy (765 ILCS 715/2).
IndianaNot required
Iowa
Keeping security deposits in interest-bearing accounts is not required; however, if the account is interest bearing, interest earned during the first five years of the tenancy goes to the landlord and thereafter to the tenant. Security deposits may not be commingled with the personal funds of the landlord (Iowa Code 562A.12(2)).
Kansas
Not required
Kentucky
Security deposits must be placed in a bank or lending institute subject to Kentucky or US regulation. Prospective tenants shall be informed of the location of the separate account and the account number. Security deposits may not be commingled with the personal funds of the landlord (Ky Rev Stat Ann 383.580(1)& (3)). 
Louisiana
Not required
Maine
Not required. However, security deposits must be held in a bank account or other financial institution so as to keep them beyond the claim of the landlord's creditors and may not be commingled with other funds (14 MRS 6038(1)). The landlord must disclose the account number and the name of the financial institution orally or in writing. This requirement does not apply to any tenancy for a dwelling unit which is part of a structure containing no more than five dwelling units, one of which is occupied by the landlord (14 MRS 6037(2)). 
Maryland
Security deposits must be held in financial institutions within Maryland in an account devoted exclusively to security deposits and bearing interest (Md Code Ann 8-203(d)(1)(ii)). Alternatively, deposits may be held in insured certificates of deposits or securities issued federally or by the state of Maryland (Md Code Ann 8-203(d)(2)). 
Massachusetts
Security deposits must be held in a separate, interest-bearing account in a bank within Massachusetts. A receipt shall be given to the tenant within 30 days after such deposit is received by the lessor, which receipt shall indicate the name and location of the bank in which the security deposit has been deposited and the amount and account number of said deposit. Failure to comply with this paragraph shall entitle the tenant to immediate return of the security deposit (Mass. Gen. Laws Ann. Ch 186, Section 15B(3)(a)). The tenant must receive the accrued interest (5% or less) at the end of each year or, if the tenancy is less than a year, within 30 days of termination. The landlord must provide a statement to the tenant with the location of the deposit, the amount on deposit, the account number, and the interest payable along with notice that the tenant may take the interest as a deduction of the next month's rent or paid out directly (Mass. Gen. Laws Ann. Ch 186, Section 15B(3)(b) ). Commingling of other assets with security deposits is prohibited (Mass. Gen. Laws Ann. Ch 186 Section 15B(1)(e)).      
Michigan
No interest is required, but the security deposit must be held in a regulated financial institution beyond the claim of the landlord's creditors for the tenant's benefit (Mich Comp Laws 554.604 & 605 ).   
Minnesota
Security deposits must be held on behalf of tenants and bear simple non-compound interest at a rate of 1% per annum. Interest amounts less than $1 are excluded from payment (Minn Stat 504B.178(2)). 
MississippiNot required
Missouri
Security deposits must be placed in a financial institution insured by a federal agency. Interest earned belongs to landlords (Mo. Rev. Stat 535.300(2)). Commingling of funds is prohibited.
Montana
Not required
Nebraska
Not required
Nevada
Not required
New Hampshire
A landlord who holds a security deposit for a period of one year or longer must pay to the tenant interest on the deposit at a rate equal to the interest rate paid on regular savings accounts in the New Hampshire bank, savings and loan association, or credit union (RSA 540-A:6(IV)(a)). Tenants may request interest accrued on security deposits every three years, 30 days before the expiration of that year's tenancy. Landlords must comply within 15 days of expiration of that year's tenancy (RSA 540-A:6(IV)(c)). Commingling deposits with the landlord's personal funds is prohibited (RSA 540-A:6(II)(b)).        
New Jersey
Landlords with 10 or more units must invest the deposit in insured money market funds or in another account paying quarterly interest at a rate comparable to the money market fund (NJSA 46:8-19(a)(1)). Landlords with fewer than 10 units may place the deposit in an interest-bearing account in any New Jersey financial institute insured by the FDIC (NJSA 46:8-19(a)(1)). All landlords must pay the tenant interest earned annually or credit it toward rent due.
New Mexico
If the security deposit is greater than one month's rent, the landlord must pay interest on an annual basis equal to passbook interest (N.M. Stat Ann 47-8-18(A)(1)). 
New York
If the security deposit is deposited in a bank, the landlord must advise the tenant in writing of the name and location of the bank. If the bank account is interest-bearing, the tenant is entitled to interest minus 1% of the total deposit that the landlord can retain for administration expenses (NY General Obligations Law 7-103). If the building has six units or more, the landlord must put the deposit in an interest-bearing account (NY General Obligations Law 7-103(2-a)). Commingling security deposits with personal funds is prohibited.
North CarolinaNo interest is required, but the landlord must deposit funds into a trust account with a licensed and federally-insured depository institution lawfully doing business in North Carolina or furnish a bond from an insurance company licensed to do business in the state. The lease must include the name and address of the financial institution where the deposit is held/ (NC Gen Stat 42-50)
North Dakota
Security deposits must be placed into a federally-insured interest-bearing savings or checking account. Interest belongs to the tenants and must be paid to the tenant upon termination of the lease (ND Century Code 47-16-07.1). However, interest is not required to be paid if occupancy was shorter than nine months in duration (ND Century Code 47-16-07.1(3)).
OhioAny security deposit in excess of $50 or one month's rent, whichever is greater, shall bear interest at a rate of 5% per year. Only applicable if the tenant is in possession for six months or more. Interest must be paid to the tenant annually and upon termination of the rental agreement (Ohio Rev. Code Ann. 5321.16(A)). 
Oklahoma
Not required, however the security deposit must be kept in an escrow account on behalf of the tenant and maintained in Oklahoma with a federally-insured institute (41 OK Stat 115(A)).
Oregon
Not required
Pennsylvania
Security deposits over $100 must be deposited in an escrow account of an institution regulated by the Federal Reserve Board, the Federal Home Loan Bank Board, the Comptroller of the Currency, or the Pennsylvania Dept. of Banking. Tenants need to be provided with the name and address of the financial institution and the deposit amount (68 PS 250.511b(a)). The escrow account may, but does not necessarily have to, generate interest (68 PS 250.511b(a)). If the deposit is in an interest-bearing account, and the rental has lasted at least two years, then the landlord may receive an administrative fee (up to 1% of the interest rate per year) and the balance of the interest must be paid to the tenant annually (68 PS 250.511b(b) & (c)). Commingling of security deposits with personal funds is prohibited.
Rhode Island
Not required
South Carolina
Not required
South Dakota
Not required
Tennessee
Interest-bearing accounts are not required. Security deposits must be deposited in a financial institution regulated by the state or federal government. Commingling of security deposits with personal funds is prohibited (Tenn Code 66-28-301(a)). Landlords must notify tenants at the time the lease is signed of the location of the account; however, landlords are not required to provide the account number (Tenn Code 66-28-301(h)).      
Texas
Not required
UtahNot required
Vermont
Not required
Virginia
Not required
Washington
Security deposits must be deposited by the landlord in a trust account, maintained by the landlord for the purpose of holding such security deposits for tenants of the landlord, in a financial institution as defined by RCW 30.22.041 or with a licensed escrow agent located in Washington. Unless otherwise agreed in writing, the landlord is entitled to receive any interest paid. The landlord shall provide the tenant with a written receipt for the deposit and written notice of the name and address and location of the institution and any subsequent change thereof. Commingling deposits with the landlord's personal funds is prohibited (RCW 59.18.270 ).   
West Virginia
Not required
Wisconsin
Not required
Wyoming
Not required. The security deposit refund should be returned "without interest" (Wyo Stat 1-21-1208(a)).
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