Security deposit interest in New Jersey

New Jersey requires landlords to pay interest on security deposits.

• Rate: Actual interest or earnings: deposit must be invested in an insured NJ money market fund or held in an NJ bank account bearing a variable market-linked rate (landlords with fewer than 10 rental units may use an ordinary insured interest-bearing account); all interest/earnings belong to the tenant
• Paid: annually, in cash or as a rent credit, on the lease renewal/anniversary or January 31 (with notice)
• Statute: N.J. Stat. Ann. § 46:8-19 · primary source

Exemptions: owner-occupied buildings with no more than 2 rental units (unless tenant invokes the law by written notice) and seasonal rentals of 125 days or less. If deposit/notice rules are violated, tenant may apply the deposit plus 7% per year toward rent.