Security deposit interest in Minnesota
Yes — Minnesota landlords must pay interest on security deposits.
Work out what you are owed in Minnesota
Enter your deposit and dates to see what Minnesota 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 Minnesota interest rate set?
Flat 1 percent per year, simple and noncompounded, set directly by statute. Interest runs from the first day of the month after the deposit is paid in full, to the last day of the month in which the landlord returns the deposit or complies with the return requirements, or to the date judgment is entered, whichever is earlier. Any interest amount under one dollar is excluded.
What does Minnesota law actually say?
Minnesota requires landlords to hold residential security deposits for the tenant and pay simple noncompounded interest at a flat statutory rate of 1 percent per year. Interest accrues from the first day of the month following full payment of the deposit until the last day of the month in which the landlord returns the deposit or complies with the return requirements, or until judgment is entered in any action over the deposit, whichever comes first. Interest amounts under one dollar are excluded.
The landlord must return the deposit with interest, or give a written statement of the specific reason for withholding it, within three weeks of termination and receipt of the tenant's mailing address, or within five days if the tenant left because the building was condemned through no fault of their own. The landlord may withhold only what is reasonably necessary for unpaid rent or to restore the premises to their condition at the start of the tenancy, ordinary wear and tear excepted, and bears the burden of proving the reason. Any attempted waiver of this section is void and unenforceable.
The section applies only to tenancies commencing or renewed on or after 1 July 1973.
When must a Minnesota landlord return the deposit?
21 days after the tenancy ends.
What if your landlord does not comply?
A landlord who fails to provide the written statement in time, fails to transfer or return the deposit, or fails to give notice of and complete the required initial and move-out inspections is liable to the tenant for a penalty equal to the withheld portion of the deposit plus interest, in addition to the wrongfully withheld deposit and interest itself. Bad-faith retention adds punitive damages of up to 500 dollars per deposit. Retention is presumed to be in bad faith if the landlord did not comply with the return requirements, unless the deposit is returned within two weeks of the tenant commencing an action.