Security deposit limits and interest: what the rules say

Two questions to check on any deposit

When you sign a lease, two questions about the deposit are worth asking: is the amount within the legal limit, and does your landlord have to pay you interest on it? The answers depend entirely on where you live. Limits range from half a month's rent to two months' rent in the examples below, and only some places require interest.

Below are examples from official sources. If your area isn't listed, check your state AG, housing agency or tenancy board.

United States: examples

California

From July 1, 2024, the total security deposit is limited to one month's rent, furnished or not. A "small landlord" may ask for up to two months' rent: an individual, or an LLC whose members are all individuals, who owns no more than two rental properties with no more than four units in total. That exception doesn't apply if the tenant is a service member.

The state's Department of Real Estate tenant guide adds a detail that catches people out. Every extra charge, such as a pet deposit, key fee or cleaning fee, counts as part of the security deposit and falls under the same cap. Application screening fees and first month's rent are separate. Some California cities have their own deposit rules on top of state law, so check with your city's housing or rent office.

New York

The General Obligations Law says a deposit or advance can't exceed one month's rent, with some exceptions. For buildings with six or more units, the landlord must hold the deposit in an interest-bearing account at a bank in the state. The landlord may keep 1 percent a year as an administrative fee, and the rest of the interest belongs to the tenant. It can be paid each year or held until the deposit is returned or used.

Florida

Florida's statute gives landlords three ways to hold a deposit: a separate non-interest-bearing account, a separate interest-bearing account, or a surety bond. With the interest-bearing account, the landlord pays the tenant either at least 75 percent of the account's average rate or 5 percent a year simple interest, whichever the landlord chooses. With the surety bond, the landlord pays the tenant 5 percent a year simple interest. The landlord must tell you in writing how the deposit is held within 30 days of receiving it.

Canada: examples

Ontario

Ontario works differently. The Landlord and Tenant Board says a landlord can collect a rent deposit of no more than one month's rent, or one week's rent if rent is paid weekly. It must be used as the rent for the last month or week of the tenancy. It cannot be used for anything else, such as paying for damage.

The landlord must pay interest on the deposit every year. According to the Board's T1 application instructions, the rate equals the rent increase guideline in effect when the interest payment is due. Ontario's guideline was 2.1 percent for 2026 and is 1.9 percent for 2027. If a landlord kept deposit money illegally, the T1 instructions say you must apply within 12 months.

British Columbia

A security deposit can be no more than half of the first month's rent. A separate pet damage deposit can also be no more than half of the first month's rent, however many pets you have. The province publishes the interest rate on deposits by year: 0 percent for 2026, 0.95 percent for 2025 and 2.7 percent for 2024. It points to the Residential Tenancy Branch's Deposit Interest Calculator for working out the amount owed when a deposit is returned.

A note on Australia

Australian rental bonds work differently: in most states they are lodged with a government bond authority, and each state sets its own maximum. Check your state's bond authority or tenancy body for the current limit before you pay.

How to check your own deposit

1. Add up everything you paid at move-in apart from the first rent payment. Include anything called a pet deposit, key deposit, cleaning fee or last month's rent. In California, these generally all count toward the cap.

2. Compare the total with your local limit. Use the rent in your lease.

3. Find out where the deposit is held. In Florida, for example, look for the landlord's written notice about how it's held.

4. Check for interest. In New York, Ontario, BC and Florida, interest may apply depending on the details. Ask how and when it's paid.

5. Keep records. Store the receipt, lease and any interest statements together.

A sample check

This sample is synthetic. A Northgate lease for a $2,000-a-month California apartment lists a $2,000 security deposit, a $400 pet deposit and a $150 cleaning fee, all paid before move-in. Under the state's tenant guide, the pet deposit and cleaning fee count as part of the security deposit, bringing the total to $2,550. That is above the one-month cap unless the small landlord exception applies, so it's a fair question to put to the landlord.

Questions to ask your landlord

• Which of the payments I made count as the security deposit?

• Does the small landlord or any other exception apply, and why?

• Where is my deposit held, and does it earn interest I'm entitled to?

• When will interest be paid or credited?

Get a second pair of eyes on your deposit

EasyToDecode is launching soon. At move-out, it will read your condition reports and any deduction statement, quote the lines that matter, flag what's missing and help you prepare a reply. See how it works or join the waitlist to hear when it opens. For lease fees in general, see apartment lease fees explained.