Security deposit interest in California
Verified against Cal. Civ. Code § 1950.5 and agency sources on 2026-07-04. Not legal advice.
California does not require landlords to pay interest on security deposits.
- Statute: Cal. Civ. Code § 1950.5 · primary source
No statewide interest requirement, but several rent-control cities mandate it (see ordinances). Statewide deposit cap is generally 1 month's rent (AB 12, eff. 7/1/2024).
City ordinances in California
- Los Angeles (LAMC § 151.06.02, RSO units): annual interest on deposits held at least 1 year; Rent Adjustment Commission rate for 2026 is 3.03% (2025 was 4.32%)
- San Francisco (Admin. Code ch. 49): interest on deposits held over 1 year, all residential units; 5.0% for 3/1/2025-2/28/2026, 4.2% for 3/1/2026-2/28/2027
- Berkeley (Rent Ordinance / Rent Board Reg. 704): annual interest at the 'Berkeley Bank Rate,' payable each December; 2025 rate 0.9%
- West Hollywood (WHMC ch. 17.32): annual interest paid each January, rate = average of five online FDIC-insured bank savings rates; 4.3% for calendar year 2025
- Santa Monica (Rent Control Charter Amendment, ch. 14 regs): deposits for rent-controlled units must be held in an interest-bearing account
Security deposit interest calculator
Frequently asked questions
Do landlords have to pay interest on security deposits in California?
No — California law (Cal. Civ. Code § 1950.5) does not require deposit interest. But note the local ordinances below.
Anything else California landlords should know about deposit interest?
No statewide interest requirement, but several rent-control cities mandate it (see ordinances). Statewide deposit cap is generally 1 month's rent (AB 12, eff. 7/1/2024).
Deposit interest in other states
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Related: rent increase rules in California · prorated rent calculator