What is the New Mexico security deposit interest rate right now?

No published figure exists. The statute names a rate source that no longer exists. Section 47-8-18(A)(1) requires "an interest equal to the passbook interest permitted to savings and loan associations in this state by the federal home loan bank board."

When must a landlord pay or credit deposit interest in New Mexico?

Interest is payable annually: the owner "shall be required to pay to the resident annually an interest ... on such deposit." The statute fixes no measuring date, so it does not say whether the year runs from the lease anniversary or on the calendar, and it requires no notice, statement or accounting of the interest.

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

No statute addresses whether the account must bear interest.

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

Nothing in the deposit section penalizes a failure to pay the interest. The forfeitures in § 47-8-18(D) — the owner loses the right to withhold any part of the deposit, loses any counterclaim, becomes liable for court costs and reasonable attorney fees, and loses an independent action for damage to the property — are triggered only by the failure to deliver the itemized written statement of deductions within thirty days of termination, as the Court of Appeals held in Stodgell v. Weissman, 2025-NMCA-003.

Do any cities or counties in New Mexico have their own deposit-interest rules?

Neither Albuquerque nor Santa Fe adds a deposit-interest rule of its own, so § 47-8-18 governs unmodified in both cities.

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

Verified August 28, 2026 All New Mexico topics →

New Mexico requires a landlord to pay annual interest on a security deposit, but only under an annual rental agreement where the deposit is greater than one month's rent — and the rate the statute names stopped existing in 1986.

Cited to NMSA 1978 § 47-8-18 (Deposits) — official annotated text of chapter 47 (A)(1), (A)(2), (B), (C), (D), (E) and 3 more cited sources · Verified August 28, 2026

Section 47-8-18(A)(1) sets the figure at "the passbook interest permitted to savings and loan associations in this state by the federal home loan bank board." That is a reference to a legal ceiling rather than to a market rate, and the federal authority to set such ceilings expired on March 31, 1986; the Federal Home Loan Bank Board was abolished three years after that. The words have stood unchanged since the section was last amended in 1989, and no New Mexico court, Attorney General opinion, agency rule or court form has ever supplied a substitute. So the duty sits on the books while the amount cannot be worked out from the statute, and no figure is published here. When interest is owed it runs on the entire deposit, not on the part above one month's rent, and it is payable every year. Nothing in the deposit section penalizes a landlord who never pays it; the tenant's real lever is the Act's two-way prevailing-party attorney-fee rule.

New Mexico deposit interest at a glance

Interest owed to the tenant	Conditional — owed only in certain circumstances
How the rate is set	The statute's rate source no longer exists — no lawful figure can be computed
Current figure	No published figure exists
Rate rules	The statute names a rate source that no longer exists. Section 47-8-18(A)(1) requires "an interest equal to the passbook interest permitted to savings and loan associations in this state by the federal home loan bank board." That points not at a market rate but at a legal ceiling — the most a savings and loan was permitted to pay. Congress ordered those ceilings phased out, and the federal authority to set them expired on March 31, 1986; since April 1, 1986 no passbook rate has been permitted to anyone. The Federal Home Loan Bank Board itself was abolished in 1989. New Mexico last amended § 47-8-18 on June 16, 1989, and the words have stood unchanged ever since. No New Mexico authority has filled the gap. The one appellate opinion that quotes the clause stops with an ellipsis exactly where the dead words begin and decides the case on other grounds (Hedicke v. Gunville, 2003-NMCA-032). The Attorney General has never opined on the section. The Administrative Code sets no substitute rate, no uniform jury instruction reaches it, and the Supreme Court's own complaint form for the return of a deposit has no line for interest at all. Four bills reopened the section between 1999 and 2023 and carried the clause forward word for word, and the 2025 rewrite of the Act did not mention it. So the duty is real and the amount is not ascertainable from the statute. No lawful figure can be computed, and none is published here.
Accrual and payment	Interest is payable annually: the owner "shall be required to pay to the resident annually an interest ... on such deposit." The statute fixes no measuring date, so it does not say whether the year runs from the lease anniversary or on the calendar, and it requires no notice, statement or accounting of the interest. When interest is owed it runs on the whole deposit, not on the portion above one month's rent.
Who and what is covered	Two conditions, both in § 47-8-18(A)(1), and both must hold: the tenancy is under an annual rental agreement, and the owner demanded or received a deposit greater than one month's rent. The two fit together, because under an agreement shorter than a year the owner may not demand or receive a deposit above one month's rent at all (§ 47-8-18(A)(2)) — so a deposit large enough to carry interest can lawfully exist only on a lease of a year or more. "Annual rental agreement" is not defined in the Act; New Mexico Legal Aid's renter's guide reads it as a written lease for a term of a year or more. The money must also be a genuine damage deposit within the Act: the Court of Appeals held that a sum nearly thirty-two times the monthly rent was not a security deposit and so bore no interest (Hedicke v. Gunville, 2003-NMCA-032).
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	Nothing in the deposit section penalizes a failure to pay the interest. The forfeitures in § 47-8-18(D) — the owner loses the right to withhold any part of the deposit, loses any counterclaim, becomes liable for court costs and reasonable attorney fees, and loses an independent action for damage to the property — are triggered only by the failure to deliver the itemized written statement of deductions within thirty days of termination, as the Court of Appeals held in Stodgell v. Weissman, 2025-NMCA-003. The $250 civil penalty in § 47-8-18(E) is tied to retaining a deposit in bad faith, not to unpaid interest. What does reach interest is § 47-8-48(A): in a suit to enforce any provision of the Uniform Owner-Resident Relations Act, the prevailing party is entitled to reasonable attorney fees and court costs. It runs both ways, so a tenant who sues for the interest and loses can be ordered to pay the owner's fees. Unpaid interest can also be raised as a counterclaim in an action for possession or rent (§ 47-8-30(A)).
Local rules	Neither Albuquerque nor Santa Fe adds a deposit-interest rule of its own, so § 47-8-18 governs unmodified in both cities.

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

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

City and county deposit-interest pages in New Mexico

Albuquerque — a verified answer to a circulating local-interest claim
Santa Fe — a verified answer to a circulating local-interest claim

Notes and caveats

Interest runs on the whole deposit, not on the excess — Landlord-facing sites commonly say New Mexico interest is owed only on the portion of the deposit above one month's rent. The statute says the owner must pay "annually an interest ... on such deposit" — the deposit itself. New Mexico Legal Aid's renter's guide states it the same way: interest on the full amount of the deposit. One month's rent is the line that switches the duty on; it is not a slice taken off the base before the arithmetic starts.
Why no figure appears here — The clause points at what a savings and loan was "permitted" to pay — a regulatory ceiling, not a market rate. The authority to set those ceilings expired on March 31, 1986, so nothing has been permitted since. Paraphrasing the clause as "the passbook savings rate" quietly swaps a ceiling that no longer exists for a market rate that does, and no New Mexico authority has made that move. The honest answer is that the statute imposes a duty and supplies no computable rate.
The forfeiture subsection does not back the interest duty — Subsection (D)'s forfeitures are triggered by one thing: the owner's failure to deliver the itemized written statement within thirty days of termination. The Court of Appeals said so in terms in Stodgell v. Weissman, 2025-NMCA-003, reading subsections (C) and (D) together. Sources that describe those forfeitures as the consequence of not paying interest have the trigger wrong, and the $250 penalty in subsection (E) is about bad-faith retention of a deposit, not about interest.
The section carries a second decayed cross-reference — Subsection (B) refers to a deposit "as defined in Subsection D [E] of Section 47-8-3" — the compiler's bracket already updates D to E for a 1999 renumbering. Later amendments moved the definition again, and "deposit" now sits in subsection F of § 47-8-3. Nothing substantive turns on it, but a reader following the letter will land in the wrong place.
No custody rule at all — Section 47-8-18 says nothing about where the deposit is kept. There is no escrow, no trust account, no named institution, and no rule against mixing the money with the owner's own funds — which is why the account questions are left open on this page rather than answered yes or no. New Mexico attaches a payment duty to the deposit without attaching any holding duty to it.

Common questions: New Mexico 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 New Mexico security deposit interest rate right now?: No published figure exists. The statute names a rate source that no longer exists. Section 47-8-18(A)(1) requires "an interest equal to the passbook interest permitted to savings and loan associations in this state by the federal home loan bank board."
When must a landlord pay or credit deposit interest in New Mexico?: Interest is payable annually: the owner "shall be required to pay to the resident annually an interest ... on such deposit." The statute fixes no measuring date, so it does not say whether the year runs from the lease anniversary or on the calendar, and it requires no notice, statement or accounting of the interest.
Does the deposit have to be in an interest-bearing account in New Mexico?: No statute addresses whether the account must bear interest.
What happens if a landlord does not pay deposit interest in New Mexico?: Nothing in the deposit section penalizes a failure to pay the interest. The forfeitures in § 47-8-18(D) — the owner loses the right to withhold any part of the deposit, loses any counterclaim, becomes liable for court costs and reasonable attorney fees, and loses an independent action for damage to the property — are triggered only by the failure to deliver the itemized written statement of deductions within thirty days of termination, as the Court of Appeals held in Stodgell v. Weissman, 2025-NMCA-003.
Do any cities or counties in New Mexico have their own deposit-interest rules?: Neither Albuquerque nor Santa Fe adds a deposit-interest rule of its own, so § 47-8-18 governs unmodified in both cities.

Citations

NMSA 1978 § 47-8-18 (Deposits) — official annotated text of chapter 47 · (A)(1), (A)(2), (B), (C), (D), (E) (verified 2026) Official source
NMSA 1978 § 47-8-48 (Prevailing party rights in lawsuit; private enforcement), as amended effective June 20, 2025 · (A) (verified 2026) Official source
NMSA 1978 § 47-8-30 (counterclaim for amounts recoverable under the Act) · (A) (verified 2026) Official source
Hedicke v. Gunville, 2003-NMCA-032 — the only New Mexico appellate opinion quoting the deposit-interest clause · ¶¶ 10, 11, 14, 15 (verified 2026) Official source

How this record was verified: Direct read of NMSA 1978 § 47-8-18 (Deposits) in the New Mexico Compilation Commission's official annotated text of chapter 47, together with § 47-8-3 (definitions), § 47-8-30 (counterclaims) and § 47-8-48 (prevailing-party rights, as rewritten effective June 20, 2025), including the compiler's notes and the case annotations to § 47-8-18; the Commission's full-text search for the statute's "passbook interest" phrase run across all forty of its collections and separately against the New Mexico Appellate Reports, the Attorney General opinions and advisory letters, the Administrative Code, the Rules Annotated and the court-forms library; the single appellate opinion the phrase returns, Hedicke v. Gunville, 2003-NMCA-032, read in full; Supreme Court-approved Form 4-906A read for any interest line; the Uniform Statute and Rule Construction Act, §§ 12-2A-1 to 12-2A-20, read for any successor-agency or successor-rate rule; the Federal Reserve Board's March 19, 1986 final amendments to Regulations D and Q read for the expiry of the federal rate-ceiling authority the clause points at; and the four bills that reopened § 47-8-18 since 1999 (1999 HB 48, 2021 HB 111 as substituted, 2022 HB 65, 2023 HB 6) plus the 2025 overhaul of the Act (SB 267, Laws 2025 ch. 122) read for any change to the rate clause.