New Jersey Security Deposit Interest
New Jersey requires deposit interest for covered rentals. The rate is set by the deposit bank.
Interest rules
| Interest required | Yes |
|---|---|
| Condition | No separate condition is listed in the supplied interest rule. |
| Rate rule | Landlords of 10 or more units: insured NJ money-market fund, or a NJ federally insured bank account bearing a variable rate established at least quarterly similar to the average rate on active interest-bearing money market transaction accounts. Landlords not in that tier: deposit in a NJ federally insured bank, savings bank, or S&L in an account bearing interest at the rate currently paid by such institutions on time or savings deposits. There is no single statewide numeric rate. |
| Current rate | Set by the bank where the deposit is held |
| How interest builds up | Interest or earnings paid by the institution belong to the tenant. Statute does not specify simple vs compound for the ordinary bank rate. |
| When it must be paid | Paid to the tenant in cash, or credited toward rent due on the renewal or anniversary of the tenant's lease, or on January 31 if the tenant was given written notice that subsequent interest payments will be made on January 31 of each year. |
| When interest may be lost | No separate forfeiture rule is supplied here; check the statute before assuming interest is lost. |
| What you can recover | If the person receiving a security deposit fails to invest or deposit the security money as required, or to provide the notice or pay the interest to the tenant as required, the tenant may give written notice that such security money plus an amount representing interest at the rate of seven percent per annum be applied on account of rent due or to become due, and thereafter the tenant shall be without obligation to make any further security deposit. |
| Statute | N.J.S.A. 46:8-19 |
Statute says
such security money plus an amount representing interest at the rate of seven percent per annum be applied on account of rent payment or payments due or to become due from the tenant
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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Open the security deposit interest calculator
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This estimate holds the selected rate constant for the whole period. Past or future rates may differ. It assumes interest has not already been paid and does not apply forfeiture rules.
Landlords of 10 or more units: insured NJ money-market fund, or a NJ federally insured bank account bearing a variable rate established at least quarterly similar to the average rate on active interest-bearing money market transaction accounts. Landlords not in that tier: deposit in a NJ federally insured bank, savings bank, or S&L in an account bearing interest at the rate currently paid by such institutions on time or savings deposits. There is no single statewide numeric rate.
Accrual: Interest or earnings paid by the institution belong to the tenant. Statute does not specify simple vs compound for the ordinary bank rate.
Enter your deposit and dates to see an estimate.
Free New Jersey 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 New Jersey law (N.J.S.A. 46:8-19 through 46:8-26), a landlord must return the deposit or send a written, itemized list of deductions within 30 days after termination of the tenant's lease or licensee's agreement.
FAQ
Does my landlord owe deposit interest in New Jersey?
Yes, for covered rentals. Landlords of 10 or more units: insured NJ money-market fund, or a NJ federally insured bank account bearing a variable rate established at least quarterly similar to the average rate on active interest-bearing money market transaction accounts. Landlords not in that tier: deposit in a NJ federally insured bank, savings bank, or S&L in an account bearing interest at the rate currently paid by such institutions on time or savings deposits. There is no single statewide numeric rate.
Which interest rate should I use?
Set by the bank where the deposit is held; there is no statewide numeric rate.
When must the landlord pay the interest?
Paid to the tenant in cash, or credited toward rent due on the renewal or anniversary of the tenant's lease, or on January 31 if the tenant was given written notice that subsequent interest payments will be made on January 31 of each year.