New York security deposit interest
In New York, landlords of six or more units must hold security deposits in a New York bank account that earns interest at the prevailing rate. The landlord may keep one percentage point of that interest a year as an administrative fee and must pass the rest to the tenant, either annually, as a credit against rent, or at the end of the tenancy.
Print this page for a dated statement showing the rate applied to each year and the statute.
How New York deposit interest works
There is no statewide published rate: the figure is whatever the bank pays, so the calculator asks for it. With the one-point deduction, a bank paying 0.5% leaves nothing for the tenant; a high-yield account paying 4% leaves 3%. Since 2019 the deposit itself is capped at one month’s rent and must be returned within 14 days with an itemised statement.
The rules in brief
- Six or more units: deposit must be in an interest-bearing New York bank account at the prevailing rate.
- Landlord may keep 1% per year as an administrative expense; the balance belongs to the tenant.
- Tenant chooses whether to receive the interest annually, as a rent credit, or at the end of the tenancy.
- Deposit capped at one month’s rent and returned within 14 days of move-out with an itemised statement; failure forfeits the landlord’s right to retain any of it.
Set by the holding bank. Whatever the account earns.
Worked examples: one year held
Assuming an account rate of 0.5%. Enter the real rate from the landlord’s notice in the calculator.
| Deposit | Interest-bearing portion | Interest owed |
|---|---|---|
| $1,000.00 | $1,000.00 | $0.00 |
| $1,500.00 | $1,500.00 | $0.00 |
| $2,500.00 | $2,500.00 | $0.00 |
Other New York deposit rules
- Maximum deposit: 1 month's rent.
- Return deadline: 14 days after the tenant vacates, with an itemized statement of any deductions; failure to provide both within 14 days forfeits the right to retain any part of the deposit.
- Late fees: Lesser of $50 or 5% of monthly rent; no late fee unless rent is unpaid more than 5 days after the due date; lease clauses waiving this are void. Application/background-check fee capped at $20 or actual cost.
Full page: New York landlord and tenant rules.
Frequently asked questions
Does every New York landlord have to pay deposit interest?
Only landlords of buildings with six or more units are required to. Smaller landlords who choose to put the deposit in an interest-bearing account must still pass on the interest, less the 1% fee.
What rate applies?
The prevailing rate paid by the bank holding the deposit. There is no state-set figure, so ask the landlord which bank holds the deposit; you are entitled to know.
Why is my interest so low?
Because the landlord may keep one percentage point of the rate as an administrative fee. If the bank paid 1% or less, the tenant’s share is zero.
Does the rule apply in New York City?
Yes, and most New York City buildings have six or more units. Rent-stabilized tenants have the same rights.