Security deposit interest in Iowa
Verified against Iowa Code § 562A.12(2) and agency sources on 2026-07-04. Not legal advice.
Iowa requires deposit interest only in specific situations.
- Applies when: tenant is entitled only to interest earned after the first 5 years of tenancy, and only if the landlord chose to hold the deposit in an interest-bearing account (an interest-bearing account is permitted, not required)
- Rate: Actual interest earned on the account; interest earned during the first 5 years of a tenancy is the property of the landlord
- Paid: at termination (with deposit return, within 30 days)
- Statute: Iowa Code § 562A.12(2) · primary source
In practice interest is rarely owed: it requires a 5+ year tenancy AND an interest-bearing account.
Security deposit interest calculator
Frequently asked questions
Do landlords have to pay interest on security deposits in Iowa?
Only in certain cases: tenant is entitled only to interest earned after the first 5 years of tenancy, and only if the landlord chose to hold the deposit in an interest-bearing account (an interest-bearing account is permitted, not required). Actual interest earned on the account; interest earned during the first 5 years of a tenancy is the property of the landlord (Iowa Code § 562A.12(2)).
When must deposit interest be paid in Iowa?
At termination (with deposit return, within 30 days).
Anything else Iowa landlords should know about deposit interest?
In practice interest is rarely owed: it requires a 5+ year tenancy AND an interest-bearing account.
Deposit interest in other states
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