What Iowa Deposit Interest Works Out To
Iowa does not publish a single rate — it is none for the first five years — that interest belongs to the landlord — so there is no fixed table to print. The calculator above takes whatever rate applies to the account and shows what it produces over the holding period. The rate usually appears on the annual statement or the notice naming the bank where the deposit sits.
When the Interest Is Never Paid
Deposit interest is one of the more commonly overlooked obligations in residential tenancy, partly because the amounts are small enough that neither side tracks them and partly because it is often owed annually while the deposit itself only comes up at move-out. A tenant who has never received an interest payment or an annual statement has usually not been told the obligation exists.
What tends to matter is documentation rather than argument. The lease records the deposit amount and the date it was paid. Bank records show when it cleared. The statute supplies the rate and the schedule, and the arithmetic follows from those three things. Where a landlord is required to give an annual statement naming the bank and the interest payable, the absence of that statement is itself part of the record.
How Iowa 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 Iowa Deposit Interest
Does my landlord have to pay interest on my security deposit in Iowa?
Yes. Iowa requires it under Iowa Code § 562A.12(2), verified as of September 11, 2026. Tenancies running longer than five years. The statute permits, but does not require, an interest-bearing account. The rate is none for the first five years — that interest belongs to the landlord. Interest earned after the five-year mark belongs to the tenant and is returned with the deposit.
How much interest is a security deposit worth in Iowa?
Iowa does not set a single published percentage — the rate is none for the first five years — that interest belongs to the landlord, so the amount depends on the account the deposit is held in. The calculator on this page takes a rate and shows what it produces across a range of deposit sizes and holding periods.
When does a Iowa landlord have to pay the interest?
Interest earned after the five-year mark belongs to the tenant and is returned with the deposit. The deposit itself is subject to a separate deadline: 30 days from the end of the tenancy and receipt of a forwarding address.
What is unusual about the Iowa rule?
Iowa is commonly listed as a state that pays tenants deposit interest. The statute says the opposite for the first five years, which covers the overwhelming majority of tenancies.