Security Deposit Laws by State: The Landlord's Guide
Maximum deposits, interest requirements, and return deadlines for every US state — and how to stay compliant.
Why security deposit rules trip up small landlords
Security deposits are one of the most heavily regulated parts of a tenancy, and the rules differ in almost every state. Three things vary the most: how much you can collect, whether you owe interest while you hold it, and how quickly you must return it after move-out.
Getting any of these wrong is expensive. Many states let a tenant recover two or three times the deposit (plus attorney's fees) if you miss a return deadline or make an improper deduction. The good news: the rules are knowable, and a few habits keep you safe.
How much can you collect?
Most states cap the deposit at one to two months' rent, though a growing number have removed the cap entirely. Always check your specific state, and remember that 'last month's rent' collected up front is often treated as a deposit under the law.
Do you owe interest on the deposit?
About a dozen states — plus cities like Chicago and Berkeley — require you to pay the tenant interest on their deposit. The rate ranges from a fixed statutory figure (Massachusetts uses 5%) to a rate the state publishes each year, and some states only require interest after the deposit has been held for a minimum period.
Here are the states that require deposit interest, with the rate, any minimum holding period, and the governing statute. Tap a state for the calculator and a tenant-ready statement. Last verified per the dates on each state page; not legal advice.
| State | Rate | Holding period | Statute |
|---|---|---|---|
| Massachusetts | 5% | 12 months | Mass. Gen. Laws ch. 186, § 15B |
| Ohio | 5% | 6 months | Ohio Rev. Code § 5321.16 |
| Minnesota | 1% | None | Minn. Stat. § 504B.178 |
| Connecticut | Published annually (~0.49%) | None | Conn. Gen. Stat. § 47a-21 |
| Illinois | Published annually (~0.01%) | 6 months | 765 ILCS 715; Chicago RLTO § 5-12-080 |
| Maryland | Greater of 1.5% or the 1-yr Treasury yield (set each Jan) | 6 months | Md. Code, Real Property § 8-203 |
| New Jersey | Bank account rate | None | N.J. Stat. § 46:8-19 |
| New York | Bank account rate | None | N.Y. Gen. Oblig. Law § 7-103 |
| Pennsylvania | Bank account rate | 24 months | 68 Pa. Stat. § 250.511b |
| New Mexico | Bank account rate | 12 months | N.M. Stat. § 47-8-18 |
| New Hampshire | Bank account rate | 12 months | N.H. Rev. Stat. § 540-A:6 |
| District of Columbia | DC statement-savings rate (resets Jan 1 & Jul 1) | None | D.C. Mun. Regs. tit. 14, § 311 |
| Florida | 5% | None | Fla. Stat. § 83.49 |
| Iowa | Bank account rate | 60 months | Iowa Code § 562A.12 |
| North Dakota | Published annually (~0.5%) | 9 months | N.D. Cent. Code § 47-16-07.1 |
Returning the deposit on time
Return deadlines typically run 14 to 60 days after move-out, and most states require an itemized list of any deductions. Send the return and itemization by a method you can prove, and keep copies of move-in and move-out condition reports.
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Not legal advice. LandlordKit provides general informational tools, not legal advice. Landlord-tenant laws change and vary by city and county. Verify the cited statute and consult a licensed attorney before acting on any result.