Security deposit interest in New York
Verified against N.Y. Gen. Oblig. Law § 7-103(2-a) and agency sources on 2026-07-04. Not legal advice.
New York requires deposit interest only in specific situations.
- Applies when: property containing six or more family dwelling units (also required for rent-stabilized units)
- Rate: Deposit must be in an interest-bearing account at a NY banking organization earning the prevailing rate for similar deposits in the area; landlord may retain 1% per annum of the deposit as an administrative fee, remainder belongs to the tenant
- Paid: annually, or held in trust until end of tenancy, or applied to rent (tenant's option)
- Statute: N.Y. Gen. Oblig. Law § 7-103(2-a) · primary source
No fixed published statewide rate - 'prevailing rate' at area banks. Buildings under 6 units: interest not required unless landlord voluntarily uses an interest-bearing account (interest then belongs to tenant). Deposits capped at 1 month's rent under HSTPA (2019).
City ordinances in New York
- New York City: same GOL § 7-103 rule applies (6+ unit buildings); no separate city rate
Security deposit interest calculator
Frequently asked questions
Do landlords have to pay interest on security deposits in New York?
Only in certain cases: property containing six or more family dwelling units (also required for rent-stabilized units). Deposit must be in an interest-bearing account at a NY banking organization earning the prevailing rate for similar deposits in the area; landlord may retain 1% per annum of the deposit as an administrative fee, remainder belongs to the tenant (N.Y. Gen. Oblig. Law § 7-103(2-a)).
When must deposit interest be paid in New York?
Annually, or held in trust until end of tenancy, or applied to rent (tenant's option).
Anything else New York landlords should know about deposit interest?
No fixed published statewide rate - 'prevailing rate' at area banks. Buildings under 6 units: interest not required unless landlord voluntarily uses an interest-bearing account (interest then belongs to tenant). Deposits capped at 1 month's rent under HSTPA (2019).
Deposit interest in other states
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Related: rent increase rules in New York · prorated rent calculator