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

No published figure exists. The statute names a market benchmark rather than a percentage. Where the money is deposited for the rental of property containing six or more family dwelling units, § 7-103(2-a) requires it to go into an interest-bearing account in a banking organization within the state "which account shall earn interest at a rate which shall be the prevailing rate earned by other such deposits made with banking organizations in such area" — the prevailing rate in the area, not whatever the landlord's own bank happens to post.

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

§ 7-103(2) gives the tenant's share of the interest three destinations: it "shall either be held in trust by the person with whom such deposit or advance shall be made, until repaid or applied for the use or rental of the leased premises, or annually paid to the person making the deposit of security money." Held in trust until the deposit is repaid, applied to the rent, or paid over annually — the section sets out the alternatives without saying who chooses among them, so the choice cannot be described as the tenant's.

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

Yes — for the tenancies the law covers, New York law requires the deposit to sit in an interest-bearing account or names the investment vehicle; the coverage conditions are on this page. Deposits are trust money. § 7-103(1) provides that the money, "with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal moneys or become an asset" of the person receiving it. Where the landlord places the deposit with a banking organization, the organization must have a place of business within the state, and the landlord must notify each tenant in writing of its name and address and of the amount of the deposit (§ 7-103(2)).

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

§ 7-103 carries no penalty of its own for an interest failure — no multiplier, no fixed sum, no fee award. What backs the duty is the status of the money: the deposit and the interest on it continue to be the tenant's property held in trust (§ 7-103(1)), so a landlord who keeps them answers on ordinary trust principles rather than under a statutory damages clause.

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

Verified August 28, 2026 All New York topics →

Check your municipality. New York does not preempt local rent regulation — city or county ordinances may impose rent caps, notice periods, and fee limits that are stricter than the state law on this page. Verify your municipality's ordinances before relying on any figure below. Verified local pages: New York City, New York municipalities outside NYC.

What the state record says

New York runs several rent-regulation regimes at once. Rent-controlled and rent-stabilized units follow DHCR rules with annual increases set by Rent Guidelines Boards, and a separate 2024 Good Cause Eviction law limits increases in covered units. The stabilization regimes are the NYC Rent Stabilization Law and the Emergency Tenant Protection Act, administered by DHCR and significantly strengthened by the 2019 HSTPA. The Good Cause Eviction law (RPL Article 6-A) applies in NYC and in localities that opt in. For covered units, a rent increase above the lesser of 5% plus CPI or 10% is presumptively unreasonable and can defeat an eviction for nonpayment of the increase.

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

S4856 (2025-2026 session) — Would amend GOL 7-108(1-a)(e) to extend the security-deposit return/itemized-statement deadline from 14 days to 30 days after the tenant vacates. Status: In Senate Judiciary Committee. Referred 2025-02-13; re-referred 2026-01-07 for the second year of the 2025-2026 session (routine). Assembly same-as: A2652. Not enacted as of the checked date. (checked July 8, 2026).

New York requires interest on a security deposit whenever the property has six or more family dwelling units: the money must sit in an interest-bearing account at a New York banking organization, and the interest belongs to the tenant.

Cited to N.Y. Gen. Oblig. Law § 7-103 (trust status; the one percent administration allowance) (1), (2) and 3 more cited sources · Verified August 28, 2026

The account must earn the prevailing rate in the area for such deposits, so there is no statewide figure. The landlord may keep, as administration expenses, one percent a year of the deposit itself — not one percent of the interest — and that allowance takes the place of every other administrative or custodial charge, with the balance of the interest going to the tenant. Below six units the deposit need not be interest-bearing at all, though it is still the tenant's money held in trust and may not be mingled with the landlord's own funds, and a landlord of a smaller building who does use an interest-bearing account comes under the same one percent rule. Any lease clause by which a tenant waives these protections is absolutely void.

New York deposit interest at a glance

Interest owed to the tenant	Conditional — owed only in certain circumstances
How the rate is set	The prevailing rate for similar deposits in the area
Current figure	No published figure exists
Rate rules	The statute names a market benchmark rather than a percentage. Where the money is deposited for the rental of property containing six or more family dwelling units, § 7-103(2-a) requires it to go into an interest-bearing account in a banking organization within the state "which account shall earn interest at a rate which shall be the prevailing rate earned by other such deposits made with banking organizations in such area" — the prevailing rate in the area, not whatever the landlord's own bank happens to post. Out of that interest the landlord may take an allowance: § 7-103(2) entitles a landlord who deposits the security money in an interest-bearing account to "a sum equivalent to one per cent per annum upon the security money so deposited, which shall be in lieu of all other administrative and custodial expenses." The one percent is measured on the deposit itself, and what the tenant takes is what the statute calls "the balance of the interest paid by the banking organization." The allowance exists only where an interest-bearing account is actually used, and it stands in place of every other administrative or custodial charge, so no further fee may be added on top of it.
Accrual and payment	§ 7-103(2) gives the tenant's share of the interest three destinations: it "shall either be held in trust by the person with whom such deposit or advance shall be made, until repaid or applied for the use or rental of the leased premises, or annually paid to the person making the deposit of security money." Held in trust until the deposit is repaid, applied to the rent, or paid over annually — the section sets out the alternatives without saying who chooses among them, so the choice cannot be described as the tenant's. Where a lease terminates at a time other than when a banking organization in the area regularly pays interest, § 7-103(2-b) requires the landlord to pay over to the tenant "such interest as he is able to collect at the date of such lease termination." Any provision of a lease by which the tenant waives any provision of § 7-103 is absolutely void (§ 7-103(3)).
Who and what is covered	The interest-bearing account is mandatory where the money is deposited for the rental of property containing six or more family dwelling units (§ 7-103(2-a)). Below that threshold there is no duty to place the deposit in an interest-bearing account, but the rest of § 7-103 still applies: the money continues to be the tenant's, held in trust and not to be mingled with the landlord's personal funds (subd. 1), and a landlord who does place it with a banking organization must give the written notice subdivision 2 requires and must use an organization having a place of business within the state. A landlord of a smaller building who chooses an interest-bearing account falls under subdivision 2 from that point, including the one percent allowance and the tenant's right to the balance of the interest.
Statute controls where or how the deposit is held	Yes
Interest-bearing account required	Yes
Custody rules	Deposits are trust money. § 7-103(1) provides that the money, "with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal moneys or become an asset" of the person receiving it. Where the landlord places the deposit with a banking organization, the organization must have a place of business within the state, and the landlord must notify each tenant in writing of its name and address and of the amount of the deposit (§ 7-103(2)). At six or more family dwelling units the account must be interest-bearing and must earn the prevailing rate in the area (§ 7-103(2-a)).
Penalty for violation	§ 7-103 carries no penalty of its own for an interest failure — no multiplier, no fixed sum, no fee award. What backs the duty is the status of the money: the deposit and the interest on it continue to be the tenant's property held in trust (§ 7-103(1)), so a landlord who keeps them answers on ordinary trust principles rather than under a statutory damages clause. Public enforcement runs through § 7-109, which lets the attorney general bring an action or proceeding to compel compliance with the title and enjoin any violation, with discretionary costs of investigation not exceeding two thousand dollars against a respondent. Those costs are the attorney general's, not a sum a tenant recovers. The damages provisions tenants meet more often — the forfeiture for a missed fourteen-day return and punitive damages of up to twice the deposit for a willful violation, in § 7-108 — attach to the duty to return the deposit and not to the interest rules of § 7-103.
Local rules	None noted for this state

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

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

Notes and caveats

One percent of the deposit, not of the interest — The allowance is "one per cent per annum upon the security money so deposited" — one percent of the deposit principal each year. It is widely misreported as one percent of the interest earned, which would leave the tenant ninety-nine percent of it. The next sentence of the subdivision confirms the structure by giving the tenant "the balance of the interest paid by the banking organization," that is, what is left after the landlord's one percent of principal comes out.
A low market rate can leave the tenant nothing — Because the landlord's allowance is a percentage of the deposit and the tenant's share is the remainder of the interest, an account earning less than one percent a year can be entirely consumed by the allowance. There is no guaranteed return to the tenant, and none of these provisions requires the landlord to make up a shortfall.
Whose rate applies — At six or more family dwelling units the account must earn "the prevailing rate earned by other such deposits made with banking organizations in such area." It is an area benchmark, not the posted rate of whichever bank the landlord picked — a distinction from states whose statutes tie the tenant to the rate of the institution actually holding the money.
The statute does not say who chooses — The tenant's share of the interest may be held in trust until the deposit is repaid, applied to the rent, or paid over annually. Those are the alternatives the statute permits, but it assigns the choice to no one, and describing them as options the tenant elects among reads something into § 7-103 that is not there.
The two thousand dollar figure — § 7-109 lets a court award the attorney general costs of investigation not exceeding two thousand dollars against a respondent in an enforcement action. That money goes to the State as the cost of investigating, and it is repeatedly written up as a penalty a tenant can collect. There is no tenant-side penalty for an interest violation in § 7-103 at all.
The 2025 amendment for rent-stabilized units — Chapter 436 of the Laws of 2025, signed October 16, 2025 and taking effect on the thirtieth day afterward for leases, rental agreements and renewals, rewrote § 7-107 to give tenants of rent-stabilized and emergency tenant-protection units a one-month cap, full refundability with enumerated deductions, pre-occupancy and pre-vacating inspections, a fourteen-day itemized return and an anti-waiver clause. It does not touch § 7-103, so the deposit-interest rules are unchanged by it.

Common questions: New York 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 York security deposit interest rate right now?: No published figure exists. The statute names a market benchmark rather than a percentage. Where the money is deposited for the rental of property containing six or more family dwelling units, § 7-103(2-a) requires it to go into an interest-bearing account in a banking organization within the state "which account shall earn interest at a rate which shall be the prevailing rate earned by other such deposits made with banking organizations in such area" — the prevailing rate in the area, not whatever the landlord's own bank happens to post.
When must a landlord pay or credit deposit interest in New York?: § 7-103(2) gives the tenant's share of the interest three destinations: it "shall either be held in trust by the person with whom such deposit or advance shall be made, until repaid or applied for the use or rental of the leased premises, or annually paid to the person making the deposit of security money." Held in trust until the deposit is repaid, applied to the rent, or paid over annually — the section sets out the alternatives without saying who chooses among them, so the choice cannot be described as the tenant's.
Does the deposit have to be in an interest-bearing account in New York?: Yes — for the tenancies the law covers, New York law requires the deposit to sit in an interest-bearing account or names the investment vehicle; the coverage conditions are on this page. Deposits are trust money. § 7-103(1) provides that the money, "with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal moneys or become an asset" of the person receiving it. Where the landlord places the deposit with a banking organization, the organization must have a place of business within the state, and the landlord must notify each tenant in writing of its name and address and of the amount of the deposit (§ 7-103(2)).
What happens if a landlord does not pay deposit interest in New York?: § 7-103 carries no penalty of its own for an interest failure — no multiplier, no fixed sum, no fee award. What backs the duty is the status of the money: the deposit and the interest on it continue to be the tenant's property held in trust (§ 7-103(1)), so a landlord who keeps them answers on ordinary trust principles rather than under a statutory damages clause.
Do any cities or counties in New York have their own deposit-interest rules?: None noted for this state.

Citations

N.Y. Gen. Oblig. Law § 7-103 (trust status; the one percent administration allowance) · (1), (2) (verified 2026) Official source
N.Y. Gen. Oblig. Law § 7-103 (six or more family dwelling units; prevailing area rate) · (2-a), (2-b) (verified 2026) Official source
N.Y. Gen. Oblig. Law § 7-109 (attorney general enforcement) (verified 2026) Official source
N.Y. Gen. Oblig. Law § 7-107 (deposits by tenants of rent-stabilized units) (verified 2026) Official source

How this record was verified: Direct read of New York General Obligations Law section 7-103 as published by the State Senate, all four subdivisions including 2-a and 2-b read word for word, together with sections 7-105, 7-107, 7-108 and 7-109 for the remedies landscape; and the enacted text of the 2025 amendment that became chapter 436 of the Laws of 2025, whose bracketed matter shows the pre-amendment section 7-107 and confirms that section 7-103 and its interest rules were left untouched. No case law and no Division of Housing and Community Renewal regulation was read, and none is relied on here.