San Francisco, California: security deposit interest

The rate is 4.2% for March 1, 2026 through February 28, 2027. Interest falls due once a year on the anniversary of the day the landlord received the deposit, paid either directly or as a credit against rent, with the landlord choosing which (§ 49.2(b)); when the tenancy ends, a tenant whose deposit was held a year or more is owed a pro-rated payment no later than two weeks after vacating (§ 49.2(c)). The duty reaches all residential rental units in the city, including units exempt from the Rent Ordinance, and the only carve-out in chapter 49 is a tenancy whose rent is assisted or subsidized by a government unit, agency or authority. Chapter 49 imposes no escrow or account duty of any kind — § 49.2(d) expressly leaves the landlord free to invest the money — so the published rate is owed whatever the deposit actually earns. None of it can be contracted away: § 49.4 makes any waiver by a tenant void as contrary to public policy.

San Francisco deposit interest at a glance

The rate

The Rent Board sets one rate a year, effective March 1 and running through the last day of the following February. Since March 1, 2015 the figure is the annual average of the Federal Reserve's 90-Day AA Financial Commercial Paper Interest Rate for the immediately preceding calendar year, rounded to the nearest tenth (§ 49.2(f)(3), added by Ord. 233-14). Two spent regimes remain printed in the code for working out older years: the Federal Reserve discount window borrowing rate for March 1, 2003 and prior years (§ 49.2(f)(1)), and the Federal Reserve 6-month certificate of deposit rate for March 1, 2004 through March 1, 2014 (§ 49.2(f)(2)). Which rate applies to a particular payment is settled by § 49.2(g): the rate in effect on the date the annual payment falls due, or the rate in effect on the date the tenant vacates where the payment is the pro-rated move-out payment. Interest is simple and is never compounded, so several years of unpaid interest are added up year by year, each at that year's own rate.

Accrual and payment

Interest accrues from the date the landlord receives the deposit — or from September 1, 1983 for deposits already held then — and keeps accruing until the tenancy ends (§ 49.2(b)). The first payment falls due once the deposit has been held a full year, and then annually on the same month and day; the landlord may pay it directly or credit it against rent, and the landlord chooses between the two. A tenant who leaves before completing a full year of occupancy is owed nothing. A tenant who leaves after a year but before the next annual due date is owed a pro-rated payment no later than two weeks after vacating, computed at the rate in effect on the move-out date (§§ 49.2(c), 49.2(g)(2)). Where the deposit itself is not enough to cover unpaid rent, tenant-caused damage beyond ordinary wear and tear, or cleaning, the landlord may keep part of the unpaid accrued interest, subject to the limits in Civil Code § 1950.5(e). A landlord of a unit covered by the Rent Ordinance and subject to the annual Rent Board fee may also deduct that fee — up to half the annual fee — from the next interest payment (§ 49.2(e) with § 37A.6).

Who and what is covered

The duty falls on any landlord "subject to the provisions of Section 1950.5 of the California Civil Code" (§ 49.2(a)) — residential landlords generally, not only those with rent-controlled units. The Rent Board says the same in its own words: the interest requirement applies to all residential rental units in San Francisco, including units exempt from the Rent Ordinance. The only condition is time — the deposit must have been held at least one year — and the only exemption in chapter 49 is a tenancy where the rent is assisted or subsidized by a government unit, agency or authority. Because § 49.1 takes the definition of the deposit from Civil Code § 1950.5 ("any payment, fee, deposit or charge" covering rent default, damage repair or cleaning), the money interest is owed on is broad, and the Rent Board applies it regardless of what the payment is called.

Custody of the deposit

None at all. Chapter 49 says nothing about escrow, trust accounts, separate accounts, interest-bearing accounts or commingling, and § 49.2(d) goes further, expressly preserving the landlord's "discretion in investing security deposits." San Francisco pairs a mandatory interest rate with entirely free custody: the landlord may hold or invest the money however they like and owes the published rate regardless of what the money actually earned.

Penalty for violation

Chapter 49 carries no penalty of its own. Section 49.3 routes the rights, obligations and remedies of landlords and tenants to subsections (f), (g), (h) and (j) of Civil Code § 1950.5, and the Rent Board states that beyond payment of the past interest owed, San Francisco lists no other penalty for late payment of interest. The Rent Board does not decide deposit or deposit-interest disputes; the forum is small claims court, where the Rent Board notes the ceiling is $12,500.

How this interacts with state law

California's deposit statute, Civil Code § 1950.5, says nothing about interest, and nothing in state law stops a California city from adding the duty. San Francisco's chapter 49 is a purely local overlay that supplies what state law omits, while leaning on § 1950.5 for everything else: the definition of the deposit (§ 49.1), the test for which landlords are covered (§ 49.2(a)), the limits on keeping accrued interest at move-out (§ 49.2(c)) and the entire remedy scheme (§ 49.3).

Published rate tables

San Francisco Rent Board security deposit interest rates, 1983 to 2027

The Rent Board's published series. Each figure governs a year running from March 1 to the last day of the following February, and § 49.2(g) picks the figure by the date the annual payment falls due or the date the tenant vacates — not by the newest figure published. Rates from March 1, 2015 come from the annual average of the Federal Reserve's 90-Day AA Financial Commercial Paper Interest Rate for the prior calendar year; March 2004 through March 2014 came from the Federal Reserve 6-month certificate of deposit rate; earlier years came from the Federal Reserve discount window borrowing rate, and before August 2002 the rate was a flat 5.0% fixed by the ordinance.

A current series — the San Francisco Rent Board, in early January each year for the one-year period beginning the following March 1. Source: official source · verified August 28, 2026.

Work out a figure: the deposit interest calculator computes San Francisco interest from this table using the locality's own published method.

Notes and caveats

• Two rates are live between January and March — The Rent Board announces the new figure in early January, but it does not take effect until March 1. For those seven weeks the announced rate and the still-operative prior rate both exist, and § 49.2(g) chooses between them by date: an annual payment takes the rate in effect on the day it falls due, and a move-out payment takes the rate in effect on the day the tenant vacates. Reaching for the newest published figure in January or February gets the wrong number.
• The ordinance number is 299-83 — Chapter 49 was added by Ordinance No. 299-83, approved June 3, 1983, and both the Rent Board's published text of the chapter and the city's official code publisher carry the same history line. Sources that give "278-83" have picked up the wrong ordinance: 278-89 is the 1989 measure that first amended § 49.2.
• The 2002-2003 transition has its own rules — The flat 5.0% that had run since 1983 ended on August 3, 2002 when the city moved to an indexed rate, and Ordinance 90-03, approved June 16, 2003, settled the mechanism. The Rent Board's rate table carries a footnote asking anyone whose annual due date fell between August 4, 2002 and June 14, 2003 to contact the Rent Board for the special rules that apply to that period only. A due date inside that window should not be worked out straight from the table.
• The Rent Board fee offset is narrower than the interest duty — A landlord who has paid the annual Residential Rent Stabilization and Arbitration fee may recover up to half of it by deducting it from the next interest payment owed on the deposit (§ 49.2(e), with the limits in § 37A.6). That offset only exists for units covered by the Rent Ordinance and subject to that fee, while the interest duty itself also reaches units exempt from the Rent Ordinance — so the two have different scopes and the deduction is not available on every deposit.
• Simple interest, added up year by year — Section 49.2(a) says simple interest, and the Rent Board confirms that interest owed for several years may not be compounded. Its own worked example: a $2,000 deposit owed interest for the 2025 year at 5.0% and the 2026 year at 4.2% produces $100 plus $84, or $184 in total.
• A typo in the official text — Section 49.2(b) directs that the tenant be given the unpaid accrued interest "in the form of ether a direct payment or a credit against the tenant's rent." The misspelling is in the official codified text and appears identically in the Rent Board's own publication of the chapter; the word is plainly "either," and the sentence gives the landlord the choice between the two methods.

Cite this page: "Landlord Atlas, San Francisco, California: security deposit interest (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/california/san-francisco/" — free to cite and quote with a link (how these records are verified).

Citations

• S.F. Admin. Code § 49.2 (payment of interest on security deposits) · (a), (b), (c), (d), (e), (f)(3), (g) (verified 2026) Official source
• S.F. Admin. Code § 49.1 (security deposit defined) (verified 2026) Official source
• S.F. Admin. Code § 49.3 (remedies) (verified 2026) Official source
• S.F. Admin. Code § 49.4 (waiver void) (verified 2026) Official source
• S.F. Admin. Code § 37A.6 (recovery of the annual Rent Board fee) · (a) (verified 2026) Official source
• San Francisco Rent Board, Security Deposit Interest Rates (Form 572, revised January 2026) (verified 2026) Official source
• San Francisco Rent Board, Chapter 49 text (Form 903) (verified 2026) Official source
• San Francisco Rent Board, security deposits topic page (verified 2026) Official source
• San Francisco Rent Board, current rates (verified 2026) Official source

How this record was verified: Direct read of San Francisco Administrative Code chapter 49 (Security Deposits for Residential Rental Property, §§ 49.1 through 49.5) in full, in the Rent Board's own published text of the chapter and in the city's official code publisher's rendering of each of the five sections, with the chapter's section boundaries established section by section rather than assumed, every occurrence of the word 'interest' examined in context, and the chapter searched for every account, escrow, separate-account, segregation, commingling, penalty, treble, bad-faith and compounding term; § 37A.6 read in full for the Rent Board fee recovery that § 49.2(e) cross-references; and the Rent Board's Security Deposit Interest Rates table (Form 572, revised January 2026), its rate announcement of January 9, 2026, its security-deposit topic page and its current-rates page read for the complete September 1983 through February 2027 rate series, the current figure and the announcement cycle. Currency of the chapter taken from the code publisher's Municipal Code currency statement (legislation through Ordinance 133-26, effective August 23, 2026), not from the neighboring stamps that govern other city code volumes.

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.