Minnesota security deposit interest
Minnesota uses a flat rate written into the statute: 1% simple interest a year on the full deposit, with no minimum tenancy and no unit-count threshold. The deposit does not have to sit in a special account, so the landlord pays the 1% out of pocket whatever the bank earned.
Print this page for a dated statement showing the rate applied to each year and the statute.
How Minnesota deposit interest works
The clock runs in whole months. Interest is counted from the first day of the month after the deposit was paid until the last day of the month before it is returned. It is paid with the deposit within three weeks of the tenant leaving, along with a written itemisation of any deductions. The rate was 3% until 1 August 2003, when the legislature cut it to 1%; it has not changed since.
The rules in brief
- Flat 1% a year, simple, on the whole deposit.
- Whole-month counting: from the first of the month after payment to the end of the month before return.
- Return within 21 days of termination and receipt of the forwarding address; a landlord who withholds in bad faith is liable for a $500 penalty on top of damages.
Fixed in statute. Does not change year to year.
Worked examples: one year held
At the current rate, for a deposit paid on 1 January 2025 and returned on 1 January 2026.
| Deposit | Interest-bearing portion | Interest owed |
|---|---|---|
| $1,000.00 | $1,000.00 | $9.15 |
| $1,500.00 | $1,500.00 | $13.73 |
| $2,500.00 | $2,500.00 | $22.88 |
Other Minnesota deposit rules
- Maximum deposit: No statutory limit.
- Return deadline: Within three weeks (21 days) after termination of the tenancy and receipt of the tenant's mailing address or delivery instructions; 5 days if the tenant leaves because the building is condemned.
- Late fees: Late fee may not exceed 8% of the overdue rent payment and only if the written lease specifies when it is imposed; no statutory grace period. For housing-assistance tenancies the fee is computed only on the tenant's share (para. (c), added 2024 c 118 s 13).
Full page: Minnesota landlord and tenant rules.
Frequently asked questions
How much is Minnesota deposit interest on $1,500 for one year?
$15. The rate is a flat 1% simple interest per year on the full deposit.
Does the 1% apply to small landlords?
Yes. Minnesota has no building-size or tenancy-length exemption.
When does the interest start accruing?
On the first day of the month after the deposit is paid, and it stops on the last day of the month before the deposit is returned.