City Ordinances That Do Require It
California has no statewide rule, but several cities legislate on deposit interest directly. For a renter in one of them, the city ordinance is the operative rule.
San Francisco
San Francisco's rate year runs March to February rather than January to December, so the applicable rate depends on which part of the year the tenancy anniversary falls in. The current rate is 4.2% for March 1, 2026 through February 28, 2027, set by San Francisco Rent Board, published in early January for the year beginning March 1 under S.F. Admin. Code § 49.2. It resets annually — the SF Rent Board — Security Deposits publishes the current figure.
Los Angeles
Applies to units covered by the Rent Stabilization Ordinance, and only where the deposit has been held for a year or more. The current rate is 3.03% for 2026, set by Los Angeles Rent Adjustment Commission, adopted by November 30 each year under L.A. Mun. Code § 151.06.02. It resets annually — the LA Housing Department — RSO publishes the current figure.
Other California cities with deposit interest ordinances include Oakland, Berkeley, Santa Monica, West Hollywood, East Palo Alto, Hayward. Each sets its own rate and its own covered-unit definition, so the municipal code is the thing that decides.
What Still Applies Without a State Requirement
Two things survive the absence of a statute. A lease can promise interest even where no law compels it, and a promise written into the lease is enforceable as a contract term on its own footing. And where a landlord does place the deposit in an interest-bearing account, what happens to the interest it earns is a question the lease and the deposit-return rules answer, rather than one that simply resolves in the landlord's favor by default.
The larger figure in most cases is not the interest at all. A deposit held for several years is money the tenant cannot invest or spend, and the calculator above shows that opportunity cost alongside any interest — which is usually the more revealing of the two numbers in a state with no requirement.
How California Compares to Nearby States
Deposit interest is one of the sharpest state-line differences in residential tenancy: neighboring states frequently land on opposite sides of it.
The full picture across all 51 jurisdictions is on the deposit interest by state index.
Common Questions About California Deposit Interest
Does my landlord have to pay interest on my security deposit in California?
Not under California statewide law. San Francisco and Los Angeles have its own ordinance, so a deposit on a covered unit in San Francisco or Los Angeles may earn interest even though no state rule requires it. Outside those cities the lease is what decides.
Which states do require security deposit interest?
Fourteen: Connecticut, the District of Columbia, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio and Pennsylvania. Several attach conditions — Ohio only on the portion above one month's rent, Pennsylvania only after the second year, Illinois only in buildings of 25 units or more, and Iowa gives the first five years of interest to the landlord rather than the tenant.
What does a held security deposit actually cost me in California?
The interest is usually the smaller number. A deposit is money that cannot be invested or spent while the landlord holds it, and over a multi-year tenancy that opportunity cost is typically larger than any interest a statute would have produced. The calculator on this page shows both figures side by side.
Can a California lease promise deposit interest anyway?
Yes. Nothing prevents a lease from providing for interest in a state that does not require it, and a term of that kind is enforceable like any other contract term. Where a lease does promise interest, the lease language rather than any statute supplies the rate and the payment schedule.