What is the Massachusetts security deposit interest rate right now?

No single figure applies: five percent per year is the ceiling set by G.L. c. 186, § 15B, and what is actually owed is that or the interest the bank paid on the deposit, whichever is less. Two clauses of § 15B carry the same rate formula. On a security deposit, § 15B(3)(b) requires the landlord to "pay interest at the rate of five per cent per year, or other such lesser amount of interest as has been received from the bank where the deposit has been held."

When must a landlord pay or credit deposit interest in Massachusetts?

Security deposit. The duty reaches a landlord who holds the deposit "for a period of one year or longer from the commencement of the term of the tenancy," and once that condition is met interest runs "beginning with the first day of the tenancy" rather than from the first anniversary.

Does the deposit have to be in an interest-bearing account in Massachusetts?

Yes — for the tenancies the law covers, Massachusetts law requires the deposit to sit in an interest-bearing account or names the investment vehicle; the coverage conditions are on this page. § 15B(3)(a) requires the deposit to be held "in a separate, interest-bearing account in a bank, located within the commonwealth," on terms that place it beyond the claim of the landlord's creditors — including a foreclosing mortgagee or a trustee in bankruptcy — and that provide for its transfer to a later owner of the property. A receipt naming the bank and its location, the amount and the account number must reach the tenant within thirty days of the deposit, and failure to comply with that paragraph entitles the tenant to immediate return of the deposit. § 15B(1)(e) makes the deposit the tenant's property, not to be commingled with the landlord's assets and beyond the claims of the landlord's creditors, with the tenant entitled only to the interest provided for in § 15B(3)(b).

What happens if a landlord does not pay deposit interest in Massachusetts?

The treble-damages provision reaches some interest failures and not others, and Massachusetts summaries routinely blur the line. § 15B(7) awards three times the security deposit or the balance to which the tenant is entitled, plus interest at five percent from the date payment became due, plus court costs and reasonable attorney's fees — but only where the landlord fails to comply with clauses (a), (d) or (e) of § 15B(6). Missing an annual interest payment or the annual statement is none of those: § 15B(3)(b) is not named in § 15B(6) at all, and the statute's own answer to that failure is the tenant's right to deduct the interest due from the next rent payment.

Does a landlord have to pay interest on a security deposit in Massachusetts?

Verified August 28, 2026 All Massachusetts topics →

Legislative changes ahead — not yet in force. This page reflects the law in force today. The following measure would change Massachusetts's landlord-tenant law:

HD2501 / 'An Act enabling local options for tenant protections' (194th General Court, 2025-2026) — Would repeal G.L. c. 40P (the Massachusetts Rent Control Prohibition Act) and replace it with a local-option regime letting municipalities cap annual rent increases at the lesser of CPI or 5% and adopt just-cause eviction. Perennial refile of prior sessions' H.1304/H.1378/H.2103, none of which advanced. Status: Filed in the 194th General Court; in committee; not enacted as of the checked date. Chapter 40P remains fully in force. (checked July 8, 2026).

Massachusetts requires interest on a security deposit held for a year or longer, at five percent a year or the lower amount the bank actually paid on the account, whichever is less.

Cited to G.L. c. 186, § 15B (security-deposit interest; the lesser-of clause) (3)(b) and 3 more cited sources · Verified August 28, 2026

The five percent is a ceiling rather than a promised rate: § 15B(3)(b) says "five per cent per year, or other such lesser amount of interest as has been received from the bank where the deposit has been held." Once the one-year condition is satisfied, interest runs from the first day of the tenancy, and it is payable at the end of each year — the landlord either pays it or tells the tenant to take it off the next rent, and if neither happens within thirty days of the year's end the tenant may take the deduction anyway. Rent collected in advance for the last month is a second, separate duty with the same rate formula and no one-year condition, so it is owed however short the tenancy, though nothing accrues for the last month itself. The deposit must sit in a separate interest-bearing account at a bank in the commonwealth, beyond the claims of the landlord's creditors.

Massachusetts deposit interest at a glance

Interest owed to the tenant	Yes — required by statute
How the rate is set	Actual earnings up to a stated ceiling
Current figure	No single figure applies: five percent per year is the ceiling set by G.L. c. 186, § 15B, and what is actually owed is that or the interest the bank paid on the deposit, whichever is less.
Rate rules	Two clauses of § 15B carry the same rate formula. On a security deposit, § 15B(3)(b) requires the landlord to "pay interest at the rate of five per cent per year, or other such lesser amount of interest as has been received from the bank where the deposit has been held." The identical formula governs rent collected in advance for the last month of the tenancy under § 15B(2)(a). The five percent is a ceiling on the obligation, not a promised return: the comparator is the interest actually received on the account required by § 15B(3)(a), so where the bank pays less than five percent — as rates on these accounts ordinarily do — the lower bank figure is what the tenant is owed. Massachusetts publishes no rate for this; the operative number comes from the account the landlord chose. The section fixes an annual rate and requires the money be handed over or credited each year, and it never describes the interest as simple or as compounding.
Accrual and payment	Security deposit. The duty reaches a landlord who holds the deposit "for a period of one year or longer from the commencement of the term of the tenancy," and once that condition is met interest runs "beginning with the first day of the tenancy" rather than from the first anniversary. A tenancy that ends at fourteen months therefore earns interest on all fourteen; one that ends at ten months earns none under this clause. Interest is payable at the end of each year of the tenancy, and at each year's end the landlord must give or send a statement showing the bank's name and address, the amount of the deposit, the account number and the interest payable. The landlord either hands over the interest or tells the tenant it may be deducted from the next rent; if thirty days pass after the year's end with neither, the tenant may deduct the interest from the next rent payment. Where the tenancy ends before an anniversary, all accrued interest is due within thirty days of termination. Advance last month's rent. Interest runs "beginning with the first day of tenancy" with no holding-period condition at all, so it is owed however short the tenancy, and no interest accrues for the last month for which the rent was paid in advance. The annual payment, the deduct-from-rent alternative, the thirty-day self-help window and the thirty-day payment on termination all match the deposit clause; the annual statement here need only state the amount payable, without the bank details the deposit statement requires.
Who and what is covered	The section reaches residential tenancies generally. It does not apply to a lease, rental, occupancy or tenancy of one hundred days or less which is for a vacation or recreational purpose (§ 15B(9)). The deposit-interest duty is itself gated on the deposit being held a year or longer; the advance last-month's-rent duty carries no such gate. Any lease provision conflicting with § 15B, and any tenant waiver of it, is against public policy and void and unenforceable (§ 15B(8)).
Statute controls where or how the deposit is held	Yes
Interest-bearing account required	Yes
Custody rules	§ 15B(3)(a) requires the deposit to be held "in a separate, interest-bearing account in a bank, located within the commonwealth," on terms that place it beyond the claim of the landlord's creditors — including a foreclosing mortgagee or a trustee in bankruptcy — and that provide for its transfer to a later owner of the property. A receipt naming the bank and its location, the amount and the account number must reach the tenant within thirty days of the deposit, and failure to comply with that paragraph entitles the tenant to immediate return of the deposit. § 15B(1)(e) makes the deposit the tenant's property, not to be commingled with the landlord's assets and beyond the claims of the landlord's creditors, with the tenant entitled only to the interest provided for in § 15B(3)(b). On a transfer the deposit passes to the successor together with the interest accrued for the tenant (§ 15B(5)), and a tenant wrongfully refused inspection of the deposit records is entitled to immediate return of the deposit with the interest accrued on it (§ 15B(2)(d)).
Penalty for violation	The treble-damages provision reaches some interest failures and not others, and Massachusetts summaries routinely blur the line. § 15B(7) awards three times the security deposit or the balance to which the tenant is entitled, plus interest at five percent from the date payment became due, plus court costs and reasonable attorney's fees — but only where the landlord fails to comply with clauses (a), (d) or (e) of § 15B(6). Missing an annual interest payment or the annual statement is none of those: § 15B(3)(b) is not named in § 15B(6) at all, and the statute's own answer to that failure is the tenant's right to deduct the interest due from the next rent payment. Interest withheld at the end of the tenancy stands differently: clause (6)(e) covers a failure to return the deposit or balance "together with any interest thereon" within thirty days after termination, and clause (e) is on the § 15B(7) list. Separately, all five clauses (a) through (e) of § 15B(6) forfeit the landlord's right to retain any portion of the deposit and to counterclaim for damage to the premises — a broader trigger than the treble list. Advance last month's rent has its own and stronger remedy: a landlord who fails to pay interest the tenant is then entitled to within thirty days after termination owes "damages in an amount equal to three times the amount of interest to which the tenant is entitled," with court costs and reasonable attorneys fees (§ 15B(2)(a)). The five percent named inside § 15B(7) is a separate add-on running from the date payment became due and is not the deposit interest of § 15B(3)(b).
Local rules	None noted for this state

Cite this page: "Landlord Atlas, Massachusetts Security Deposit Interest Laws (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/massachusetts/" — free to cite and quote with a link (how these records are verified). Everything above is cited in the citations section below.

Calculate Massachusetts security deposit interest — free, no signup, built on the same verified Massachusetts law as this page.

Notes and caveats

Five percent is a ceiling, not the rate — Fifty-state charts commonly list Massachusetts as a five percent state. The statute sets five percent as the maximum: the landlord owes five percent a year or the interest the bank actually paid, whichever is less. Because rates on these accounts are ordinarily well under five percent, the amount a tenant is owed is usually the bank's figure, and the landlord cannot be made to pay a return the account never earned. A tenant learns the figure from the annual statement, which must give the bank's name and address, the amount of the deposit, the account number and the interest payable.
Two separate interest duties, with different rules — A Massachusetts landlord who took both a security deposit and rent in advance for the last month owes interest on each, under different clauses. The deposit duty applies only where the deposit is held a year or longer. The last-month's-rent duty has no holding condition and starts on the first day of the tenancy, but nothing accrues for the final month the rent was paid to cover. Treating the two as one rule gets the short tenancy wrong in both directions.
Which failures are trebled — Failing to pay the annual deposit interest is not one of the failures § 15B(6) lists, so it does not trigger the triple-damages provision at § 15B(7); the statutory answer is the tenant's right to deduct the interest from the next rent. Withholding accrued interest at the end of the tenancy is different, because clause (6)(e) covers the return of the deposit "together with any interest thereon" and clause (e) is on the treble list — and there the trebling runs on the deposit, not on the interest. For advance last month's rent it is the interest itself that is trebled.
The statute says neither simple nor compound — § 15B fixes an annual rate and requires the interest to be paid or credited at the end of each year of the tenancy. It never uses the word simple and never uses the word compound. Sources that describe Massachusetts deposit interest as statutorily simple are adding a word the section does not contain; Minnesota, by contrast, writes "simple noncompounded" into its own text.
A fee charged in place of a deposit — An amendment effective August 1, 2025 added provisions to § 15B for fees charged in lieu of a security deposit. It leaves every interest clause of the section as it was, and no part of § 15B says whether such a fee earns interest for the tenant.

Common questions: Massachusetts 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 Massachusetts security deposit interest rate right now?: No single figure applies: five percent per year is the ceiling set by G.L. c. 186, § 15B, and what is actually owed is that or the interest the bank paid on the deposit, whichever is less. Two clauses of § 15B carry the same rate formula. On a security deposit, § 15B(3)(b) requires the landlord to "pay interest at the rate of five per cent per year, or other such lesser amount of interest as has been received from the bank where the deposit has been held."
When must a landlord pay or credit deposit interest in Massachusetts?: Security deposit. The duty reaches a landlord who holds the deposit "for a period of one year or longer from the commencement of the term of the tenancy," and once that condition is met interest runs "beginning with the first day of the tenancy" rather than from the first anniversary.
Does the deposit have to be in an interest-bearing account in Massachusetts?: Yes — for the tenancies the law covers, Massachusetts law requires the deposit to sit in an interest-bearing account or names the investment vehicle; the coverage conditions are on this page. § 15B(3)(a) requires the deposit to be held "in a separate, interest-bearing account in a bank, located within the commonwealth," on terms that place it beyond the claim of the landlord's creditors — including a foreclosing mortgagee or a trustee in bankruptcy — and that provide for its transfer to a later owner of the property. A receipt naming the bank and its location, the amount and the account number must reach the tenant within thirty days of the deposit, and failure to comply with that paragraph entitles the tenant to immediate return of the deposit. § 15B(1)(e) makes the deposit the tenant's property, not to be commingled with the landlord's assets and beyond the claims of the landlord's creditors, with the tenant entitled only to the interest provided for in § 15B(3)(b).
What happens if a landlord does not pay deposit interest in Massachusetts?: The treble-damages provision reaches some interest failures and not others, and Massachusetts summaries routinely blur the line. § 15B(7) awards three times the security deposit or the balance to which the tenant is entitled, plus interest at five percent from the date payment became due, plus court costs and reasonable attorney's fees — but only where the landlord fails to comply with clauses (a), (d) or (e) of § 15B(6). Missing an annual interest payment or the annual statement is none of those: § 15B(3)(b) is not named in § 15B(6) at all, and the statute's own answer to that failure is the tenant's right to deduct the interest due from the next rent payment.
Do any cities or counties in Massachusetts have their own deposit-interest rules?: None noted for this state.

Citations

G.L. c. 186, § 15B (security-deposit interest; the lesser-of clause) · (3)(b) (verified 2026) Official source
G.L. c. 186, § 15B (interest on rent paid in advance for the last month) · (2)(a) (verified 2026) Official source
G.L. c. 186, § 15B (separate interest-bearing account; receipt) · (3)(a) (verified 2026) Official source
G.L. c. 186, § 15B (forfeiture list and treble damages) · (6), (7) (verified 2026) Official source

How this record was verified: Direct read of Massachusetts General Laws chapter 186, section 15B as published by the Legislature, subsections (1) through (9) read in full, with the security-deposit interest clause at (3)(b), the advance last-month's-rent clause at (2)(a), the account clause at (3)(a), the records-inspection and transfer clauses at (2)(d) and (5), the forfeiture list at (6), the treble-damages provision at (7), the anti-waiver clause at (8) and the vacation-rental exclusion at (9) read word for word; the section's published effective-date brackets examined for any amendment touching an interest clause. No case law was read, and no case-law proposition is stated in this record.