Renting & housing · Question
Do you get interest on your security deposit in New York?
Updated By The editorial teamNot reviewed by an attorney — based on the official sources below
In short
Often, yes. Under General Obligations Law § 7-103, your security deposit stays your money, held in trust, and can't be mixed with the landlord's own funds. If your building has six or more apartments, the landlord must keep it in an interest-bearing account at a bank in New York and tell you in writing the bank's name and address and the amount. The landlord may keep 1% of the deposit a year for administrative costs; the rest of the interest belongs to you. In rent-stabilized apartments, the deposit must earn interest whatever the building's size. In smaller buildings, interest is owed only if the landlord chooses an interest-bearing account.
Read on for the details, the exceptions and the sources.
In plain words
- Held in trust
- The landlord holds the money for you; it isn't theirs to spend or mix with their own funds.
- Commingle
- Mix your deposit with the landlord's personal or business money. New York law forbids it.
- Administrative fee
- The 1% of the deposit per year the landlord may keep from the interest for managing the account.
- Prevailing rate
- The interest rate banks in the area normally pay on similar accounts.
The full answer
Every security deposit or rent advance, in any size building, stays the money of the tenant who paid it, with any interest it earns. The landlord must hold it in trust and may not mix it with their own money or treat it as an asset (General Obligations Law § 7-103(1)). If the landlord deposits it in a bank, they must notify you in writing of the bank's name and address and the amount deposited, and the bank must have a place of business in New York (§ 7-103(2)).
In a building with six or more apartments, the deposit must go into an interest-bearing account at a New York bank, earning the prevailing rate for the area (§ 7-103(2-a)). From the interest, the landlord may keep a sum equal to 1% a year of the deposit for administrative costs, instead of any other fees. The balance of the interest is yours: the landlord either holds it in trust until it is repaid to you or applied to rent, or pays it to you every year (§ 7-103(2)). The Attorney General's guide adds that tenants must be given the choice to have it paid yearly, applied to rent, or paid at the end of the lease, and that a landlord of a smaller building who voluntarily uses an interest-bearing account must follow the same rules.
The Attorney General's example: on a $1,000 deposit earning 1.5% a year, the account earns $15; the landlord may keep $10 (1% of the deposit) and $5 belongs to you. If the account earns 1% or less, there may be little or no interest left for you. Any lease clause waiving these rules is void (§ 7-103(3)).
Exceptions and special cases
- Rent-stabilized apartments: according to DHCR Fact Sheet #9, the deposit must be kept in an interest-bearing account at a New York bank, the owner must tell you the bank's name and address, and you get the annual interest minus 1% of the deposit a year; you choose whether it's credited to rent, held until the end of the tenancy, or paid yearly.
- If your lease ends between the dates the bank pays interest, the landlord must pay you the interest they're able to collect at the end date (§ 7-103(2-b)).
- If the building is sold, the landlord must turn deposits over to the new owner within five days of the deed and notify you by registered or certified mail of the new owner's name and address; failing to do so is a misdemeanor (§ 7-105). The Attorney General's guide notes that buyers of rent-stabilized buildings are directly responsible for returning deposits and interest.
- Buildings with fewer than six apartments: the deposit must still be held in trust and not mixed with the landlord's money (§ 7-103(1)), but an interest-bearing account isn't required.
What to do now
Count the apartments in your building
Six or more units, or a rent-stabilized apartment, means the deposit must earn interest.
Ask in writing where your deposit is
Request the bank's name and address and the amount on deposit, which § 7-103(2) requires the landlord to give you.
Choose how to receive interest
Ask to have it paid yearly, credited to rent, or paid at the end of the lease, and keep a copy of your request.
At move-out, ask for the deposit plus interest
The 14-day rule for returning your deposit or an itemized statement of deductions still applies (General Obligations Law § 7-108(1-a)(e)).
If the landlord won't pay
Send a written demand, then consider small claims court. You can also file a rent security complaint with the Attorney General's office.
Calculator
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Figures that change
- Landlord's administrative share of deposit interest: 1% of the deposit per year (as of 2026-10-30; N.Y. General Obligations Law)
- Building size that requires an interest-bearing account: 6 or more apartments (as of 2026-10-30; N.Y. General Obligations Law)
Frequently asked questions
My building has four apartments. Do I get interest?
Only if the landlord chose to put the deposit in an interest-bearing account; then the same 1% rule applies. Either way, the landlord must hold your deposit in trust and not mix it with their own money (§ 7-103(1)).
Can the landlord keep all the interest?
No. They may keep only a sum equal to 1% a year of the deposit for administrative costs; the rest of the interest is yours (§ 7-103(2)).
Does a new owner have to return my deposit?
When a building is sold, the old owner must transfer the deposit to the new owner and notify you, and the new owner then becomes responsible for returning it (§ 7-105(1)–(2)).
Want your own situation checked?
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Check my situation — freeOfficial sources
This page was written from the sources below. “Checked” is the date the source was last opened and read.
- N.Y. General Obligations Law (opens in a new tab)New York State Senate — Open Legislation (official text of the Consolidated Laws) · § 7-103(1)–(3); § 7-105; § 7-108(1-a)(e) · Checked: October 30, 2026Deposit held in trust; interest-bearing account for 6+ units; bank notice; 1% fee; transfer on sale; 14-day return rule
- Residential Tenants' Rights Guide (opens in a new tab)Office of the New York State Attorney General · Checked: October 30, 2026Choice of how interest is paid; voluntary accounts in smaller buildings; worked example; buyers of stabilized buildings; complaints
- Fact Sheet #9: Renting an Apartment — Security Deposits and Other Charges (opens in a new tab)New York State Homes and Community Renewal (Division of Housing and Community Renewal) · Checked: October 30, 2026Interest on deposits in rent-stabilized apartments and the tenant's choice of payment
- Small Claims — New York State Unified Court System (opens in a new tab)New York State Unified Court System — CourtHelp · Checked: October 30, 2026Recovering a deposit and interest in small claims court
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This page is general information based on the official sources listed, current as of the update date. It is not legal advice and does not replace a review of your own situation; if a case is already in court, a deadline is close, the amount is large, or there are criminal, immigration or family-law consequences, talk to a lawyer or legal aid.