Does a landlord have to pay interest on a security deposit in Alabama?
Alabama requires no interest on a residential security deposit, and imposes no duty to hold the deposit in any particular place.
Cited to Ala. Code § 35-9A-201 (Security deposits; prepaid rent) (a)-(h) and 1 more cited source · Verified August 28, 2026
Ala. Code § 35-9A-201 is a fully developed deposit section — a one month's rent ceiling with express room to charge more for pets, changes to the premises or increased liability risks; a sixty-day clock for the refund and for an itemized list of anything withheld; a forwarding-address duty on the tenant; forfeiture of a deposit left unclaimed for ninety days; and double the tenant's original deposit if the landlord misses the sixty-day deadline — and it never mentions interest, an account, an escrow or a trust. Neither does any other section of the chapter. The only account-shaped words in force are "itemized accounting" in subsections (d) and (e), which mean a statement of amounts withheld, not a bank account.
Alabama deposit interest at a glance
| Interest owed to the tenant | No — no statute addresses it |
|---|---|
| How the rate is set | No rate exists — there is no interest duty |
| Current figure | No published figure exists |
| Rate rules | No rate rules — no duty exists |
| Accrual and payment | No payment duty exists |
| Who and what is covered | No statutory conditions stated — see the summary and notes |
| Statute controls where or how the deposit is held | No statute addresses how the deposit is held |
| Interest-bearing account required | No statute addresses whether the account must bear interest |
| Custody rules | No statute addresses custody of the deposit |
| Penalty for violation | No statutory penalty reaches an interest violation specifically |
| Local rules | None noted for this state |
Cite this page: "Landlord Atlas, Alabama Security Deposit Interest Laws (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/alabama/" — free to cite and quote with a link (how these records are verified). Everything above is cited in the citations section below.
Check the verified Alabama answer — and every state and city that differs — in the deposit interest calculator — free, no signup, built on the same verified Alabama law as this page.
Notes and caveats
- "Itemized accounting" is a statement, not a bank account — § 35-9A-201(d) and (e) require the landlord to mail "the deposit or itemized accounting, or both" to the tenant's forwarding address. This is the reckoning of what was kept and why. It is the closest Alabama's statutory text comes to the word 'account', and it creates no custody duty of any kind.
- An Illinois chapter title sits inside Alabama's comments — The uniform-act commentary printed with the 2006 act contains a comparative-law footnote citing "Illinois – P.A. 77-705, Sec. 3, Acts of 1971, Ill.Stat.Ann., Ch. 74 (Interest), Sec. 91-93." That is the name of an Illinois code chapter in a 1970s note. It is the single most likely source of a false "Alabama has an interest rule" hit, and it should be recognised on sight: comments are not part of the compiled code. Two further comment passages mention "the security and prepaid rent account" in discussing how loss is allocated when the property is sold — again commentary, again creating nothing.
- Every 'interest' in the current chapter is an ownership or security interest — § 35-9A-201(h) binds "[t]he holder of the landlord's interest in the premises at the time of the termination of the tenancy"; § 35-9A-122 excludes an occupant who succeeds to a purchaser's interest; § 35-9A-141 uses the word in the holdover definition and in the "organization" list that also supplies the chapter's only two uses of 'trust'; and § 35-9A-425 concerns a landlord's lien or security interest. None is money earned on a deposit.
- The 2006 figures are stale — do not quote them — As enacted in 2006 the section said thirty-five days for the refund and one hundred eighty days for forfeiture. Act 2014-279 changed those to sixty and ninety. Reproductions of the original act still circulate with the old numbers. Both versions are equally silent on interest — the 2014 amendment did not touch the subject — and the chapter as a whole has not been amended since 2018.
Common questions: Alabama deposit interest
Each answer is the verified value from the table above, restated as a direct answer. Free to quote with a link to this page.
- What is the Alabama security deposit interest rate right now?
- No published figure exists.
- When must a landlord pay or credit deposit interest in Alabama?
- No payment duty exists.
- Does the deposit have to be in an interest-bearing account in Alabama?
- No statute addresses whether the account must bear interest.
- What happens if a landlord does not pay deposit interest in Alabama?
- No statutory penalty reaches an interest violation specifically.
- Do any cities or counties in Alabama have their own deposit-interest rules?
- None noted for this state.
Citations
- Ala. Code § 35-9A-201 (Security deposits; prepaid rent) · (a)-(h) (verified 2026) Official source
- Act 2006-316 (the Alabama Uniform Residential Landlord and Tenant Act as enacted, with Alabama Comments) · § 35-9A-201 (verified 2026) Official source
How this record was verified: Complete read of the current text of all forty-eight sections of Ala. Code ch. 35-9A (the Alabama Uniform Residential Landlord and Tenant Act) as published by the Legislature's own code service, together with the act as enacted, Act 2006-316, including its Alabama Comments and the uniform-act comments; § 35-9A-201 (security deposits; prepaid rent) read in full in both presentations, with its history line; every occurrence of 'interest', 'escrow', 'trust', 'bearing' and 'account' examined in context across both the current chapter text and the as-enacted text; and the amendment history of every section in the chapter read, showing five acts have ever touched it and the most recent, Act 2018-473, reaches only § 35-9A-421.