Minnesota Security Deposit Interest Calculator & Escrow Rules
$22.00
Calculated at the statutory rate of 1% per year under Minn. Stat. § 504B.178, Subd. 2 (Minn. Stat. § 504B.178, Subd. 2).
Minnesota Deposit Interest Laws at a Glance (Minn. Stat. § 504B.178, Subd. 2)
Paid at the conclusion of the tenancy alongside the itemized return of the security deposit balance.
| Statutory Interest Mandate | Mandatory under state law |
|---|---|
| Statutory Interest Rate | 1% per year (Minn. Stat. § 504B.178, Subd. 2) |
| Minimum Tenancy Duration | 1 months of continuous tenancy |
| Escrow Account & Banking Rule | Must be deposited in an insured financial institution and accrue simple, noncompounded interest. |
| Governing Statute | Minn. Stat. § 504B.178, Subd. 2 ↗ |
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Key Minnesota Statutory Nuances & Escrow Case Law
- Simple 1% Statutory Rate: Minn. Stat. § 504B.178 Subd. 2 mandates simple, noncompounded interest computed at 1% per annum.
- No Administrative Withholding: Landlords cannot deduct administrative fees from accrued statutory interest in Minnesota.
- Bad Faith Withholding Damages: Failure to return deposit and interest within 21 days subjects landlord to a statutory penalty of 1% of the amount withheld plus $500 under § 504B.178 Subd. 4.
Minneapolis 2-Year Lease Deposit Interest
$1,800
24 months
$36.00
Under Minn. Stat. § 504B.178, simple interest of 1% per annum on $1,800 over 24 months (2 full years) equals $36.00 owed to the tenant upon move-out.
Minnesota Security Deposit Interest FAQs
What is the security deposit interest rate in Minnesota?
Under Minnesota Statutes § 504B.178, Subd. 2, the statutory simple interest rate on residential security deposits is 1% per annum.
When is security deposit interest paid in Minnesota?
Interest is paid when the deposit is returned, which must occur within 21 days of tenancy termination and receipt of the tenant forwarding address.
Does deposit interest compound in Minnesota?
No. Minnesota statute explicitly specifies that interest is noncompounded simple interest.
Are any Minnesota residential landlords exempt from paying interest?
No. Minn. Stat. § 504B.178 applies universally to all residential landlords across Minnesota.