deposit-interest

Security Deposit Interest in Massachusetts: 5% per annum, or the (2026)

Massachusetts landlords must pay interest on security deposits held one year or longer at 5% per year or the lesser amount actually received from… Calculator, statute citation, Last Verified date o

Rule verified: 2026-10-28

Quick answer

Yes — Massachusetts requires landlords to pay interest on qualifying security deposits. Massachusetts landlords must pay interest on security deposits held one year or longer at 5% per year or the lesser amount actually received from the bank (whichever is less), transferred to the tenant at the end of each year of tenancy; the deposit must be kept in a bank in the Commonwealth. The rule comes from Mass. Gen. Laws c. 186, § 15B. State statute (official text) · 2026-10-28

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State pre-filled: Massachusetts — rule applied per Mass. Gen. Laws c. 186, § 15B. Switch the state if your property is elsewhere.

StateSecurity deposit ($)Tenancy startTenancy end

The current rate in Massachusetts

Massachusetts sets a statutory rate of 5% per annum, or the lesser amount of interest actually received from the bank where the deposit is kept, whichever is less. M.G.L. c. 186 § 15B(6): landlord must pay/transfer interest 'at the rate of five per cent per year' or such lesser amount as was actually received from the bank. The same 5%/actual rule applies to last month's rent (§ 15B(2)(a)). Deposit must be held in an account in a bank located in Massachusetts. The statute fixes this rate directly — it does not float with what a bank happens to pay.

How interest must be paid

No compounding specified; interest accrues and is transferred/credited annually. Interest must be transferred to the tenant at the end of each year of the tenancy (anniversary date); if the tenancy ends before the anniversary date, accrued interest must be transferred within 30 days of termination.

Who the law applies to

Residential rental units covered by M.G.L. c. 186 § 15B (deposits on residential real property; statutory exemptions exist for certain occupancies — see § 15B(1)). Interest owed for deposit held one year or longer.

How Massachusetts compares in the Northeast

State	Rate	Rule
Connecticut	Not less than the 'deposit index' for that year as defined in C.G.S. §	interest required
Delaware	—	no statewide requirement
District of Columbia	Interest accrued in the interest-bearing escrow account at the prevail	interest required
Maine	—	no statewide requirement
Massachusetts	5% per annum, or the lesser amount of interest actually received from	interest required
New Hampshire	Interest at the rate paid on regular savings accounts at the bank wher	interest required
New Jersey	Interest actually earned in the NJ interest-bearing account (no statew	interest required
New York	Interest actually accrued/paid on the deposit in the interest-bearing	interest required
Pennsylvania	Interest earned in the bank escrow account, with the landlord retainin	interest required
Rhode Island	—	no statewide requirement
Vermont	—	no statewide requirement

The statute behind it

| Field | Value | | --- | --- | --- | | Citation | Mass. Gen. Laws c. 186, § 15B | | Official text | malegislature.gov | | Last verified | 2026-10-28 |

⚠️ No independent second source opened (mass.gov consumer guide not retrieved); statutory text itself was read directly from the official Legislature page

Statutes get amended. If you are relying on this page — for a move-out, a dispute, or a lease draft — click through to the official text and confirm the current wording.

FAQ

Does Massachusetts require landlords to pay interest on security deposits?

Yes. Under Mass. Gen. Laws c. 186, § 15B, qualifying landlords in Massachusetts must pay interest — currently 5% per annum, or the lesser amount of interest actually received from the bank where the deposit is kept, whichever is less. Residential rental units covered by M.G.L. c. 186 § 15B (deposits on residential real property; statutory exemptions exist for certain occupancies — see § 15B(1)). Interest owed for deposit held one year or longer.

How is deposit interest calculated in Massachusetts?

At 5% per annum, or the lesser amount of interest actually received from the bank where the deposit is kept, whichever is less. No compounding specified; interest accrues and is transferred/credited annually. The calculator at the top of this page applies exactly this rule to your deposit amount and dates.

When do I get the interest?

Interest must be transferred to the tenant at the end of each year of the tenancy (anniversary date); if the tenancy ends before the anniversary date, accrued interest must be transferred within 30 days of termination.

Independent second source · 2026-10-28