Berkeley, California: security deposit interest
Berkeley requires a landlord to pay interest on a residential security deposit every year, in December, at a rate the Rent Stabilization Board publishes each November.
Cited to Berkeley Mun. Code § 13.76.070 (security deposits), in the Rent Stabilization and Eviction for Just Cause Ordinance and 3 more sources · Verified August 28, 2026
The deposit is held in a fiduciary capacity for the benefit of the tenant and accrues simple interest from the day it is taken (§ 13.76.070). Interest accrued through October 31 is returned each December, as a cash payment or a rent rebate, and the rate for the December 2025 payment was 0.9%. When a tenant leaves, the balance accrued since the last October 31 is paid at the average monthly rate for the twelve months before the departure date, together with the principal and any interest still unpaid from earlier years. The duty covers tenancies in units fully or partially covered by the Rent Ordinance, so a unit exempt from rent ceilings can still owe deposit interest. A landlord who has not paid by January 31 faces a penalty rate rather than a fine: the tenant may recover the previous year's interest at 10% by deducting it from rent, without having to give notice first (Regulation 704).
Berkeley deposit interest at a glance
| Interest owed under local law | Yes — required by local law |
|---|---|
| How the rate is set | A figure announced on a published cycle |
| Current figure | 0.9% for the annual payment made in December 2025, published by the Rent Stabilization Board; the rate for the December 2026 payment is due to be noticed on or before November 15, 2026 and has not been published yet. |
The rate
The annual December rate is the 12-month average of the average rates of interest paid on six-month certificates of deposit ($5,000 minimum) by insured commercial banks doing business in Berkeley, sampled on the first business day of each month across the twelve months ending November 1, rounded to the nearest tenth (§ 13.76.070; Regulation 702(C)). The Board must give public notice of the rate on or before November 15 each year for the following December. Move-out payments take a different figure — the average monthly rate for the twelve months immediately preceding the departure date (Regulation 702(D)(1)) — which the Board publishes as a rolling monthly table beside the annual rates; a tenancy that began on or after the preceding November 1 uses the annual rate instead (Regulation 702(D)(3)), and one that spanned the preceding October 31 uses the rate that applied to the last annual payment (Regulation 702(D)(2)). Interest is simple, and the Board's own calculator prorates by whole months: the rate divided by twelve, multiplied by the number of months, applied to the deposit. Interest left unpaid from earlier years is rate-banded by Regulation 702(E) — the rate actually earned, if the landlord can document it, for periods ending before December 31, 2004; the Regulation 701(C) table for 2004 through 2008; a choice between the two tables for 2009 through 2013, where the landlord may use the Berkeley bank figure only by identifying the bank account used, on a Board form, when the interest is paid; and the Regulation 701(D) Berkeley bank rate for periods after November 1, 2013, whether or not the deposit was held at a Berkeley bank.
Accrual and payment
Interest accrues from the moment the landlord takes the money and runs until the deposit is returned to the tenant or the landlord becomes entitled to use it under Civil Code § 1950.5. The interest year ends October 31: interest accrued through that date must be returned to the tenant in December of the same year, as a rent rebate or a cash payment (§ 13.76.070; Regulation 702(B)). When the tenant leaves, the balance accrued since the last October 31 is returned along with the appropriate part of the principal and any interest still unpaid from earlier years. Where interest was never paid at all, Regulation 702(E)(1) reaches back to June 28, 1980 or the start of the tenancy, whichever is later.
Who and what is covered
Interest is owed on tenancies in units fully or partially covered by Berkeley's Rent Ordinance — the Board's own scope phrase, and the reason a unit exempt from rent ceilings can still owe deposit interest. The money covered is broad: any payment, fee, deposit or charge taken at the start of a tenancy as an advance payment of rent or to be used for rent defaults, damage caused by the tenant or cleaning, and § 13.76.070 expressly includes an advance payment of rent. The first month's rent is not a deposit; money paid beyond the first month's rent, last month's rent included, is part of the deposit. Application and screening fees are not deposits.
Custody of the deposit
The landlord holds the deposit in a fiduciary capacity for the benefit of the tenant until it is returned or the landlord is entitled to use it under Civil Code § 1950.5 (§ 13.76.070; Regulation 701(A)). Berkeley names no account type, no institution and no segregation duty — the fiduciary character of the holding is the whole of the custody rule, and the published rate is owed whatever the money actually earns.
Penalty for violation
Regulation 704 substitutes a penalty rate. Where the tenant has not received the December payment by January 31, the interest rate for the immediately preceding calendar year becomes 10%, and the tenant may recover that interest by deducting it from rent. It attaches by itself: since the amendment of September 19, 2019 the tenant does not have to give the landlord notice of an intention to deduct. For years other than the immediately preceding one, Regulation 704 sends the reader to the table in Regulation 701(C), which stops at 2013 — Regulation 702(E) is what routes later arrears years to the Berkeley bank table.
How this interacts with state law
California's deposit statute, Civil Code § 1950.5, says nothing about interest, and Berkeley's duty is entirely local. The city's ordinance and regulations borrow § 1950.5 for one thing only: the point at which the landlord becomes entitled to use the deposit, which is where accrual stops. Nothing in state law requires the local rate or stands in its way.
Published rate tables
Berkeley bank rate — annual December payments (Regulation 701(D))
The rates the Rent Stabilization Board publishes for the annual payment. Each year's figure is paid in December of that year and covers interest accrued from the previous November 1 through October 31. Since 2013 this is the only table used for current payments. For 2009 through 2013 it overlaps the older Federal Reserve table below and gives lower figures in four of those five years; for unpaid interest from those years a landlord may use the Berkeley figure only by identifying the bank account used, on a Board form, when the interest is paid.
| Period | Rate | Note |
|---|---|---|
| 2009 annual payment (December 2009) | 0.9% | The Federal Reserve table at Regulation 701(C) gives 1.1% for 2009; which figure applies to unpaid interest turns on the election described above. |
| 2010 annual payment (December 2010) | 0.4% | The only overlap year where the two tables agree. |
| 2011 annual payment (December 2011) | 0.3% | The Federal Reserve table at Regulation 701(C) gives 0.4% for 2011. |
| 2012 annual payment (December 2012) | 0.2% | The Federal Reserve table at Regulation 701(C) gives 0.5% for 2012. |
| 2013 annual payment (December 2013) | 0.1% | The Federal Reserve table at Regulation 701(C) gives 0.3% for 2013; from November 1, 2013 the Berkeley bank rate applies on its own. |
| 2014 annual payment (December 2014) | 0.1% | |
| 2015 annual payment (December 2015) | 0.1% | |
| 2016 annual payment (December 2016) | 0.1% | |
| 2017 annual payment (December 2017) | 0.1% | |
| 2018 annual payment (December 2018) | 0.1% | |
| 2019 annual payment (December 2019) | 0.2% | |
| 2020 annual payment (December 2020) | 0.2% | |
| 2021 annual payment (December 2021) | 0% | A published rate of zero, not a missing figure: the Berkeley bank average for that year came out at 0.0%. |
| 2022 annual payment (December 2022) | 0.1% | |
| 2023 annual payment (December 2023) | 0.7% | |
| 2024 annual payment (December 2024) | 1.2% | |
| 2025 annual payment (December 2025) | 0.9% | The current annual figure. The rate for the December 2026 payment is due to be noticed on or before November 15, 2026. |
A current series — the Rent Stabilization Board, by public notice on or before November 15 each year for the payment due the following December. Source: official source · verified August 28, 2026.
Federal Reserve six-month certificate of deposit rates (Regulation 701(C))
The original table, taken from the Federal Reserve's published rates on six-month certificates of deposit at insured commercial banks. The Federal Reserve stopped publishing that rate in July 2013 for want of data, and the Board amended its regulations so that current payments use the Berkeley bank rate alone — this series will never grow. It stays live for one purpose: interest left unpaid from earlier years, which Regulation 702(E) and Regulation 704 still route to it. Its figures for 2009 through 2013 differ from the Berkeley bank table for the same years, and the applicable one depends on the election in Regulation 702(E).
| Period | Rate | Note |
|---|---|---|
| calendar year 1980 | 13.6% | |
| calendar year 1981 | 15% | |
| calendar year 1982 | 12.8% | |
| calendar year 1983 | 9.2% | |
| calendar year 1984 | 10.7% | |
| calendar year 1985 | 8.3% | |
| calendar year 1986 | 6.6% | |
| calendar year 1987 | 6.9% | |
| calendar year 1988 | 7.8% | |
| calendar year 1989 | 9.1% | |
| calendar year 1990 | 8.3% | |
| calendar year 1991 | 6% | |
| calendar year 1992 | 3.8% | |
| calendar year 1993 | 3.4% | |
| calendar year 1994 | 4.8% | |
| calendar year 1995 | 6% | |
| calendar year 1996 | 5.5% | |
| calendar year 1997 | 5.7% | |
| calendar year 1998 | 5.5% | |
| calendar year 1999 | 5.4% | |
| calendar year 2000 | 6.6% | |
| calendar year 2001 | 3.8% | |
| calendar year 2002 | 1.8% | |
| calendar year 2003 | 1.2% | |
| calendar year 2004 | 1.6% | |
| calendar year 2005 | 3.4% | |
| calendar year 2006 | 5.1% | |
| calendar year 2007 | 5.3% | The Board amended the table in March 2010 to correct this year's figure to 5.3%. |
| calendar year 2008 | 3.4% | The Board amended the table in February 2011 to correct this year's figure to 3.4%. |
| calendar year 2009 | 1.1% | |
| calendar year 2010 | 0.4% | |
| calendar year 2011 | 0.4% | |
| calendar year 2012 | 0.5% | |
| calendar year 2013 | 0.3% | The last year of the series; the Federal Reserve stopped publishing the underlying rate in July 2013. |
A closed series that will not grow. Source: official source · verified August 28, 2026.
Work out a figure: the deposit interest calculator computes Berkeley interest from these tables, keeping each series separate, using the locality's own published method.
Notes and caveats
- Two official tables, and for five years they disagree — Berkeley publishes two rate tables, and they are not alternatives to pick freely between. Regulation 701(C) carries the Federal Reserve six-month certificate of deposit series for 1980 through 2013; Regulation 701(D) carries the Berkeley bank rate from 2009 onward. They overlap for 2009 through 2013 and give different figures in four of those five years — 2009, 2011, 2012 and 2013 — with the Berkeley figure the lower one. Which table governs is conditional: for unpaid interest from those years, Regulation 702(E) lets the landlord use the Berkeley figure only if the landlord identifies the bank account used, on a Board form, at the time the interest is paid; otherwise the Federal Reserve figure applies. A single quoted "Berkeley rate" for 2012 is wrong in one direction or the other unless it says which table it came from.
- The January 31 penalty is a rate, not a share of the deposit — Regulation 704 is often described as letting a tenant deduct ten percent of the deposit. It does something different: it replaces the published rate for the immediately preceding calendar year with a rate of 10%, and the tenant deducts that interest from rent. On a $2,000 deposit held for a full year the substituted rate produces $200, in place of the $18.00 that 2025's published 0.9% would have produced. It reaches only the immediately preceding year, and it works without the tenant giving notice.
- The city publishes its own calculator — The Rent Stabilization Board runs a security deposit interest calculator on its own site, which is the city's official arithmetic: the rate divided by twelve, multiplied by the number of whole months, applied to the deposit. Its month counting follows the interest year, which runs November 1 to October 31 — for a first annual payment, the months from the start of the tenancy through October 31, otherwise twelve; for a move-out, the months from November 1 to the move-out date. The Board says the calculator is best for simple cases and asks tenants and landlords with several years of unpaid interest, or a move-out more than a year ago, to speak to a housing counselor.
- Partially covered units still owe interest — The Board's scope phrase is units "fully or partially covered" by the Rent Ordinance. A unit that is exempt from rent ceilings — new construction under state law, for instance — can still be partially covered, and deposit interest is one of the duties that survives. Accounts that treat Berkeley's deposit-interest duty as running only to rent-controlled units understate it.
- A repealed regulation is still printed — Regulation 703, on payment of interest where funds are not deposited, was repealed on December 6, 2004, but its text is still printed in the Board's published regulations under a heading that records the repeal. It contains a rule about six months' advance rent that is easy to read as live law. It is not.
- Why the index changed in 2013 — The Federal Reserve stopped publishing its six-month certificate of deposit rate in July 2013, saying the data needed to derive it was no longer available. The Board responded by amending its regulations so that deposits earn interest at the Berkeley bank rate alone, and it has said it will go back to a Federal Reserve rate if one is published again. That is why the older table stops at 2013 and why anything after November 1, 2013 uses the Berkeley figure.
- The ordinance and the regulations describe the banks differently — Section 13.76.070 sets the rate by reference to six-month certificates of deposit at banks doing business in the City, while Regulations 701(B) and 702(A) carry the older phrasing, insured commercial banks. Both texts stand as published and neither has been reconciled to the other. No figure turns on it: the Board computes and publishes the rate under Regulation 702(C), which describes insured commercial banks doing business in the City of Berkeley, and the published tables are what a landlord pays.
Cite this page: "Landlord Atlas, Berkeley, California: security deposit interest (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/california/berkeley/" — free to cite and quote with a link (how these records are verified).
Citations
- Berkeley Mun. Code § 13.76.070 (security deposits), in the Rent Stabilization and Eviction for Just Cause Ordinance (verified 2026) Official source
- Berkeley Rent Stabilization Board Regulations ch. 7 (security deposits) · Regulations 701, 702, 703, 704 (verified 2026) Official source
- Berkeley Rent Stabilization Board, security deposit interest calculator and published rates (verified 2026) Official source
- Berkeley Rent Stabilization Board, security deposits (verified 2026) Official source
How this record was verified: Direct read of Berkeley Municipal Code § 13.76.070 in the Rent Stabilization Board's published text of the Rent Stabilization and Eviction for Just Cause Ordinance (Ordinance No. 7,950-N.S.), and of the Board's Regulations chapter 7 (Regulations 701 through 706) in full, including both published rate tables at Regulation 701(C) and Regulation 701(D), the rate method and the arrears bands at Regulation 702, the repeal line carried on Regulation 703 and the rent-deduction remedy at Regulation 704 with its amendment history; the Board's security deposit interest calculator page read for the annual rate series from 2009 through 2025, the rolling move-out table, the current figures, the Board's own input instructions and its statement of the scope of the duty; and the Board's Measure BB before-and-after handout searched for any change to § 13.76.070, which it does not mention.
This page records local law on deposit interest. The statewide position — California's security-deposit statute says nothing about interest — no part of Civil Code § 1950.5 requires a landlord to pay or credit a tenant any interest on a residential deposit. — lives on the California deposit-interest page with its own citations and verification date.