If you rent in San Francisco, your landlord owes you interest on your security deposit once they’ve held it for at least one year. For the period running March 1, 2026 through February 28, 2027, the security deposit interest rate in San Francisco is 4.2%.1San Francisco Residential Rent Stabilization and Arbitration Board. 572 Security Deposit Interest Rates The requirement comes from San Francisco Administrative Code Chapter 49, in force since September 1, 1983.2San Francisco Administrative Code. San Francisco Administrative Code SEC 49.2 – Payment of Interest on Security Deposits
Which Rentals Are Covered
Chapter 49 reaches further than San Francisco’s rent control ordinance. It applies to any landlord covered by California Civil Code Section 1950.5, which governs residential security deposits generally.3California Legislative Information. California Civil Code 1950.5 Newer buildings, single-family homes, and condos that are exempt from rent stabilization still owe interest on held deposits.
The one carve-out: units where rent is assisted or subsidized by a government agency.4San Francisco Rent Board. San Francisco Administrative Code Chapter 49 – Interest on Security Deposits If a housing voucher or similar program covers part of your rent, your landlord is not required to pay interest under this ordinance.
Current and Recent Rates
Each rate applies to a fixed twelve-month window from March 1 through the end of February. The rate can swing hard from year to year because it’s tied to a short-term commercial lending benchmark rather than a savings yield.
- March 2026 – February 2027: 4.2%
- March 2025 – February 2026: 5.0%
- March 2024 – February 2025: 5.2%
- March 2023 – February 2024: 2.3%
The Rent Board publishes the complete table back to 1983, which you’ll need if you’re calculating interest across multiple years of tenancy.1San Francisco Residential Rent Stabilization and Arbitration Board. 572 Security Deposit Interest Rates
When the Payment Is Due
Interest starts accruing the day your landlord receives the deposit. The first payment comes due once that deposit has been held for a full year, and then annually on the same month and day after that.2San Francisco Administrative Code. San Francisco Administrative Code SEC 49.2 – Payment of Interest on Security Deposits If you paid your deposit on June 15, that’s your annual date going forward. Tenants who paid before September 1, 1983 have a September 1 anniversary.1San Francisco Residential Rent Stabilization and Arbitration Board. 572 Security Deposit Interest Rates
Your landlord picks the form of payment: either a direct payment by check or electronic transfer, or a credit against your next month’s rent. You don’t get to choose. The rate that applies is whichever one is in effect on the day the payment is due.2San Francisco Administrative Code. San Francisco Administrative Code SEC 49.2 – Payment of Interest on Security Deposits
What Happens at Move-Out
When your tenancy ends, your landlord owes a pro-rata interest payment covering the stretch between your last annual due date and the day you vacate. Chapter 49 gives the landlord two weeks after move-out to pay it.4San Francisco Rent Board. San Francisco Administrative Code Chapter 49 – Interest on Security Deposits The rate used is the one in effect on your actual move-out date, not your anniversary.
This is a separate deadline from the deposit refund itself. California law gives landlords 21 calendar days to return the deposit with an itemized statement of any deductions.3California Legislative Information. California Civil Code 1950.5 You could get the interest check before the deposit refund arrives.
The Rent Board Fee Offset
One catch surprises tenants. If your landlord is allowed to pass through the annual Rent Stabilization and Arbitration Board fee, the landlord can subtract it from your interest payment instead of billing you separately.2San Francisco Administrative Code. San Francisco Administrative Code SEC 49.2 – Payment of Interest on Security Deposits In a low-rate year that offset can wipe the interest out entirely.
How to Calculate What You’re Owed
Chapter 49 requires simple interest, not compound. You apply each year’s rate to the original deposit amount, not to a growing balance. You need three things: the deposit amount, the date it was paid, and the applicable rate for each annual period.
Say your deposit is $3,000 and your anniversary falls within the March 2026–February 2027 window. At 4.2%, one full year of interest is $126.00 ($3,000 × 0.042).1San Francisco Residential Rent Stabilization and Arbitration Board. 572 Security Deposit Interest Rates For a partial year at move-out, divide by 365 and multiply by the days since your last anniversary. If you vacated 90 days into the new cycle at 4.2%, the pro-rata interest would be about $31.07.
For long-term tenants owed years of back interest, repeat that calculation for each annual cycle using the rate in effect at the time. Rates have ranged from as low as 0.1% in recent low-rate years to well over 5% during the early 1990s and again in 2024–2025.
If Your Landlord Doesn’t Pay
Start with a written demand. Send a letter citing San Francisco Administrative Code Chapter 49 and showing the amount owed, the years involved, and the rates you used. Keep a copy. A lot of landlords pay as soon as they see that the tenant has done the math.
If that fails, Small Claims Court is the most direct route. You can sue without a lawyer, and the current jurisdictional limit is $12,500. For units covered by the Rent Ordinance, you can also file a petition with the Rent Board alleging a decrease in housing services, since unpaid interest can be treated as a lost financial benefit. The Rent Board’s Forms Center lists the applicable petition forms.
The real leverage sits in California Civil Code 1950.5. If a landlord retains your deposit (or arguably the interest on it) in bad faith at move-out, a court can award statutory damages of up to twice the deposit amount on top of the actual sum owed.3California Legislative Information. California Civil Code 1950.5 On a $3,500 deposit, that penalty alone could reach $7,000. The landlord carries the burden of proving any amounts withheld were reasonable.
Some tenants simply deduct unpaid interest from their next rent check. The ordinance technically permits it, but it leaves a paper trail that can be misread as short rent. Sending a demand letter first and filing in Small Claims if the landlord ignores you is the safer path.
A Note on Taxes
Interest paid on your deposit is taxable income, reported like bank interest. If your landlord pays you $10 or more in a calendar year, they should issue a Form 1099-INT. Even without one, the interest is still reportable. At current rates and typical San Francisco deposit amounts, most tenants will clear the $10 threshold without trouble.