Illinois Security Deposit Interest
Illinois requires deposit interest under certain conditions. The rate rule includes 0.005%. Condition: Applies to properties with 25 or more units in one building or neighboring buildings, with deposits held more than 6 months. Public housing and tenants in default are excluded.
Interest rules
| Interest required | Conditional |
|---|---|
| Condition | A lessor of residential real property, containing 25 or more units in either a single building or a complex of buildings located on contiguous parcels of real property ... on any deposit held by the lessor for more than 6 months. Does not apply to public housing, nor to a lessee who is in default under the terms of the lease. |
| Rate rule | Equal to the interest paid by the largest commercial bank, as measured by total assets, having its main banking premises in Illinois, on minimum deposit passbook savings accounts as of December 31 of the calendar year immediately preceding the inception of the rental agreement. IDFPR Division of Banking publishes the figure annually. |
| Current rate | 0.005% (IDFPR: interest paid as of Dec. 31, 2025; APY 0.01%). Applies to leases whose inception year is 2026 (rate taken from Dec. 31 of the preceding calendar year). |
| How interest builds up | Computed from the date of the deposit. Statute does not specify simple vs compound. |
| When it must be paid | Within 30 days after the end of each 12 month rental period, pay any interest that has accumulated to an amount of $5 or more, by cash or credit applied to rent due, except when the lessee is in default. Pay all unpaid accumulated interest, regardless of amount, upon termination of the tenancy. |
| When interest may be lost | No payment required when the lessee is in default under the terms of the lease (as to the annual $5-or-more payout). |
| What you can recover | A lessor who willfully fails or refuses to pay the interest required by this Act shall, upon a finding by a circuit court that he has willfully failed or refused to pay, be liable for an amount equal to the amount of the security deposit, together with court costs and reasonable attorneys fees. |
| Statute | 765 ILCS 715/1, 715/2, 715/3 |
Statute says
A lessor who willfully fails or refuses to pay the interest required by this Act shall, upon a finding by a circuit court that he has willfully failed or refused to pay, be liable for an amount equal to the amount of the
What this means
This is the longest excerpt in the supplied research record. Read the linked source for the complete provision.
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Chicago: Chicago RLTO (Municipal Code ch. 5-12) - interest on security deposits and prepaid rent held more than six months. Common exemption: owner-occupied buildings of 6 or fewer units (check current RLTO coverage). 0.01% for January 1, 2026 through December 31, 2026 (Chicago Municipal Code §§ 5-12-081, 5-12-082). City source
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Condition: A lessor of residential real property, containing 25 or more units in either a single building or a complex of buildings located on contiguous parcels of real property ... on any deposit held by the lessor for more than 6 months. Does not apply to public housing, nor to a lessee who is in default under the terms of the lease.
The result assumes this condition is met.
Equal to the interest paid by the largest commercial bank, as measured by total assets, having its main banking premises in Illinois, on minimum deposit passbook savings accounts as of December 31 of the calendar year immediately preceding the inception of the rental agreement. IDFPR Division of Banking publishes the figure annually.
Listed rate: 0.005% (IDFPR: interest paid as of Dec. 31, 2025; APY 0.01%). Applies to leases whose inception year is 2026 (rate taken from Dec. 31 of the preceding calendar year).
Accrual: Computed from the date of the deposit. Statute does not specify simple vs compound.
Enter your deposit and dates to see an estimate.
Free Illinois template, built from verified state data
I rented [rental property address] from [lease start date] to [move-out date]. I paid a security deposit of $[amount]. I returned the keys on [date] and gave you my forwarding address in writing on [date]. Under Illinois law (765 ILCS 710/1), a landlord must return the deposit or respond in writing within [45 days / 30 days, see the note above] after [the event listed in the note above].
FAQ
Does my landlord owe deposit interest in Illinois?
Only when the legal condition is met. A lessor of residential real property, containing 25 or more units in either a single building or a complex of buildings located on contiguous parcels of real property ... on any deposit held by the lessor for more than 6 months. Does not apply to public housing, nor to a lessee who is in default under the terms of the lease.
Which interest rate should I use?
0.005% (IDFPR: interest paid as of Dec. 31, 2025; APY 0.01%). Applies to leases whose inception year is 2026 (rate taken from Dec. 31 of the preceding calendar year). Equal to the interest paid by the largest commercial bank, as measured by total assets, having its main banking premises in Illinois, on minimum deposit passbook savings accounts as of December 31 of the calendar year immediately preceding the inception of the rental agreement. IDFPR Division of Banking publishes the figure annually.
When must the landlord pay the interest?
Within 30 days after the end of each 12 month rental period, pay any interest that has accumulated to an amount of $5 or more, by cash or credit applied to rent due, except when the lessee is in default. Pay all unpaid accumulated interest, regardless of amount, upon termination of the tenancy.