Security deposit interest in Massachusetts
Verified against Mass. Gen. Laws ch. 186, § 15B(3)(b) and agency sources on 2026-07-04. Not legal advice.
Massachusetts requires landlords to pay interest on security deposits.
- Applies when: deposit held for at least 1 year
- Rate: 5% per year or the actual interest received from the bank where the deposit is held, whichever is less; deposit must be in a separate interest-bearing Massachusetts account (same rule applies to last month's rent paid in advance, from day one)
- Current rate: 5%
- Paid: annually on the tenancy anniversary; all accrued interest within 30 days of termination
- Statute: Mass. Gen. Laws ch. 186, § 15B(3)(b) · primary source
5% is a statutory cap, not a floor - actual bank interest applies if lower. Violations of the deposit-handling rules carry mandatory treble damages plus attorney's fees.
Security deposit interest calculator
Frequently asked questions
Do landlords have to pay interest on security deposits in Massachusetts?
Yes. 5% per year or the actual interest received from the bank where the deposit is held, whichever is less; deposit must be in a separate interest-bearing Massachusetts account (same rule applies to last month's rent paid in advance, from day one) (Mass. Gen. Laws ch. 186, § 15B(3)(b)).
What is the Massachusetts security deposit interest rate?
5%. 5% per year or the actual interest received from the bank where the deposit is held, whichever is less; deposit must be in a separate interest-bearing Massachusetts account (same rule applies to last month's rent paid in advance, from day one)
When must deposit interest be paid in Massachusetts?
Annually on the tenancy anniversary; all accrued interest within 30 days of termination.
Anything else Massachusetts landlords should know about deposit interest?
5% is a statutory cap, not a floor - actual bank interest applies if lower. Violations of the deposit-handling rules carry mandatory treble damages plus attorney's fees.
Deposit interest in other states
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Related: rent increase rules in Massachusetts · prorated rent calculator