Security deposit interest in Massachusetts
Yes — Massachusetts landlords must pay interest on security deposits after one year.
Work out what you are owed in Massachusetts
Enter your deposit and dates to see what Massachusetts law entitles you to.
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Not legal advice. This is an estimate for informational purposes only and is not legal advice. Security deposit laws change and vary by jurisdiction. Verify with the cited statute or consult a licensed attorney in your state before taking action.
How is the Massachusetts interest rate set?
5% per year, OR the lesser amount actually earned by the bank account where the deposit is held, whichever is less. Deposit must be held in a separate interest-bearing account at a Massachusetts bank.
What does Massachusetts law actually say?
Massachusetts requires interest on a residential security deposit only where the lessor holds it for one year or longer from the start of the tenancy. Interest runs from the first day of the tenancy at 5% per year, or the lesser rate actually paid by the bank holding the deposit. It must be paid or credited to the tenant at the end of each year of tenancy; if the tenancy ends before the anniversary, all accrued interest is due within 30 days of termination.
The deposit is capped at one month's rent and must sit in a separate interest-bearing account at a Massachusetts bank. Last-month's-rent paid in advance carries the same 5% interest requirement separately. Leases of 100 days or less for vacation or recreational purposes are excluded.
When must a Massachusetts landlord return the deposit?
30 days after the tenancy ends.
What if your landlord does not comply?
Failure to pay interest due within 30 days of termination: treble the interest owed, plus court costs and reasonable attorney fees. Failure to hold the deposit in a proper account, or failure to return the deposit within 30 days: treble the deposit plus 5% interest from the due date, plus costs and fees.