What Massachusetts Deposit Interest Works Out To
| Deposit | 1 year | 2 years | 5 years |
|---|
| $1,000 | $50 | $100 | $250 |
| $1,500 | $75 | $150 | $375 |
| $2,500 | $125 | $250 | $625 |
| $5,000 | $250 | $500 | $1,250 |
Figures use simple interest at 5%, which is how Massachusetts calculates it. They are what the statute produces, not what a landlord necessarily paid — the gap between the two is the reason the figure is worth checking.
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 Massachusetts 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 Massachusetts Deposit Interest
Does my landlord have to pay interest on my security deposit in Massachusetts?
Yes. Massachusetts requires it under M.G.L. ch. 186, § 15B, verified as of September 11, 2026. Tenancies of one year or longer from the start of the term. The rate is 5% a year, or the lesser amount the bank actually paid. At the end of each year of the tenancy. If the tenancy ends before its anniversary, accrued interest is due within 30 days of termination.
How much interest is a security deposit worth in Massachusetts?
At 5%, a $1,000 deposit earns about $50 a year and a $2,500 deposit about $125 a year, calculated as simple interest. Over a multi-year tenancy those figures add up to more than most tenants expect, which is why the annual statement matters.
When does a Massachusetts landlord have to pay the interest?
At the end of each year of the tenancy. If the tenancy ends before its anniversary, accrued interest is due within 30 days of termination. The deposit itself is subject to a separate deadline: 30 days after the end of the tenancy for the deposit itself.
What is unusual about the Massachusetts rule?
The 5% figure is the ceiling, not a guarantee — where the bank paid less, the lesser amount is what is owed. The landlord must also give an annual statement naming the bank, the account number and the interest payable.