Minneapolis, Minnesota: security deposit interest
Minneapolis sets no security-deposit interest rate of its own: the city's ordinance expressly leaves the deposit — interest included — to Minnesota Statutes § 504B.178, so a Minneapolis tenant is owed the state's one percent simple interest per year, paid when the tenancy ends.
Cited to Minneapolis Code of Ordinances § 244.2040 (security deposits) and 1 more source · Verified August 28, 2026
What the city adds is a cap on the deposit's size and a notice duty. The deposit may not exceed one month's rent — or half a month's rent where the lease demands more than the first month's rent plus the deposit up front, in which case the tenant may also insist on paying the deposit in installments over up to three months — with a one-and-a-half-month allowance for units let under a referral from a nonprofit or government agency. When the state statute's return-or-statement clock runs, the landlord must also deliver a city-approved written notice of the tenant's deposit rights.
Minneapolis deposit interest at a glance
| Interest owed under local law | The local code defers to the state rule |
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Who and what is covered
The city section applies to rental dwellings licensed under the city's rental-license article; the deposit's handling, interest included, runs on the state statute for every tenancy.
How this interacts with state law
Minneapolis writes no deposit-interest rule of its own. Its security-deposit section adopts the state statute's definition and closes with a general deference clause: any deposit "shall be governed by the provisions of Minnesota Statutes Section 504B.178, together with this section." The interest a Minneapolis tenant is owed — one percent simple per year, paid when the tenancy ends — comes entirely from state law.
Notes and caveats
- The deference is general, not interest-specific — Section 244.2040 never mentions interest or a rate. Its subsection (a) adopts the state statute's definition of a security deposit and subsection (b) closes by making the whole deposit subject to the state statute together with the city's own section. The one percent figure belongs to state law alone — the ordinance would not need amending if the state rate changed.
- City enforcement — Violations of the city's deposit-cap and notice rules can be prosecuted criminally, counted against the rental license, or fined administratively, and the city need not issue a notice of violation first.
Cite this page: "Landlord Atlas, Minneapolis, Minnesota: security deposit interest (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/minnesota/minneapolis/" — free to cite and quote with a link (how these records are verified).
Citations
- Minneapolis Code of Ordinances § 244.2040 (security deposits) · (a), (b) (verified 2026) Official source
- Minn. Stat. § 504B.178 (the state deposit-interest duty) (verified 2026) Official source
How this record was verified: Search of the entire Minneapolis Code of Ordinances (codified through Ordinance No. 2026R-004, adopted January 5, 2026) for every security-deposit provision, with all four matching sections read and classified; the whole of Title 12 (Housing) examined for every co-occurrence of deposit and interest language; and § 244.2040 read in full on the city's code publisher.
This page records local law on deposit interest. The statewide position — Minnesota requires interest on every residential security deposit at one percent a year, simple and noncompounded, and it is paid with the deposit when the tenancy ends. — lives on the Minnesota deposit-interest page with its own citations and verification date.