Security deposit interest in North Carolina
No — North Carolina does not require landlords to pay interest on security deposits.
There is no interest to calculate — here is what does apply
North Carolina sets no interest requirement, so there is no figure to work out. The rules below are the ones that decide whether you get your deposit back in full, which is usually the larger sum anyway.
Deadline to return your deposit
30 days after the tenancy ends.
Miss it and the consequences below start to apply.
What to do next
- Give your landlord a written forwarding address. Several states make the return duty conditional on it, and North Carolina's rules are summarised below.
- Photograph the unit at move-out, dated, before you hand back the keys. The dispute is almost always about condition.
- If the deadline passes, put the request in writing and cite N.C. Gen. Stat. Sec. 42-50 to 42-56 (Tenant Security Deposit Act). Keep a copy of what you sent and when.
Not legal advice. This is general information, 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.
What does North Carolina law actually say?
North Carolina does not require landlords to pay interest on residential security deposits to tenants. This is a common point of confusion: the statute does require every deposit to be held in a trust account at a federally insured North Carolina bank, or secured by a bond from a licensed insurance company, and the tenant must be told the bank's name and address or the insurer's name within 30 days of the tenancy beginning. However, the statute expressly provides that any interest earned on the deposit above the amount required to be paid to the tenant, which is nothing, belongs to the landlord.
Deposits are capped by tenancy length: two weeks' rent for weekly tenancies, one and a half months' rent for monthly tenancies, and two months' rent for terms longer than month to month. A reasonable non-refundable pet fee may be charged separately. Deductions are limited to unpaid rent, damage beyond ordinary wear and tear, unpaid utility bills, rent lost due to tenant default, re-renting costs after breach, court costs, and removal and storage of the tenant's property after lawful eviction.
The landlord must itemise and refund within 30 days, or provide an interim accounting within 30 days and a final one within 60 days where the amount cannot yet be determined.
What if your landlord does not comply?
No interest obligation, so no interest penalty. A landlord who fails to account for and refund the deposit within 30 days forfeits all rights to retain any portion of it. The tenant may also recover court costs and, at the court's discretion, reasonable attorney fees. Where a landlord fails to maintain the trust account or bond as required, the tenant may recover the deposit. Rights under this Article cannot be waived by lease.