New Jersey Security Deposit Interest Calculator & Escrow Rules
In New Jersey, interest reflects actual bank yield less a 1% landlord administrative fee.
$33.00
Calculated at 2.5% annual rate under N.J.S.A. 46:8-19, less a 1% annual landlord administrative deduction.
New Jersey Deposit Interest Laws at a Glance (N.J.S.A. 46:8-19)
Paid annually to tenant in cash or credited toward the payment of rent due on the anniversary date of the lease.
| Statutory Interest Mandate | Mandatory under state law |
|---|---|
| Statutory Interest Rate | 2% per year (N.J.S.A. 46:8-19) |
| Minimum Tenancy Duration | 12 months of continuous tenancy |
| Escrow Account & Banking Rule | Must be deposited in a state or federal bank in New Jersey in an account yielding the regular rate of interest. |
| Governing Statute | N.J.S.A. 46:8-19 ↗ |
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Key New Jersey Statutory Nuances & Escrow Case Law
- Annual Credit or Payment: Landlord must pay accrued interest annually or credit it against the tenant next rent payment under N.J.S.A. 46:8-19.
- 1% Landlord Administrative Deduction: The landlord is entitled to receive 1% of the deposit per year to defray administrative expenses.
- Banking Notice Prerequisite: Landlord must notify tenant in writing within 30 days of receipt specifying bank name, account type, and current rate.
Newark 1-Year Escrow Interest Breakdown
$2,000
12 months
$20.00
Assuming an escrow bank yield of 2.0% ($40), the landlord is entitled to a 1% admin fee ($20) under N.J.S.A. 46:8-19, leaving $20.00 net interest credited to the tenant.
New Jersey Security Deposit Interest FAQs
Are New Jersey landlords required to pay interest on deposits?
Yes. Under N.J.S.A. 46:8-19, landlords must deposit funds in an interest-bearing account and pay the interest to the tenant annually.
How much administrative fee can a New Jersey landlord retain?
Under N.J.S.A. 46:8-19, landlords may retain 1% of the deposit amount per year for administrative handling expenses.
What happens if a New Jersey landlord fails to put the deposit in an escrow bank?
Under N.J.S.A. 46:8-19(c), the tenant may give written notice requiring the landlord to apply the full deposit plus 7% annual interest toward future rent.
Do New Jersey landlords have to notify tenants about the bank account?
Yes. Within 30 days of receiving the deposit, the landlord must provide written notice with the bank name, branch address, account type, and interest rate.