California Security Deposit Interest: Which Cities Require It

California state law requires no interest on a security deposit at all. Every interest obligation in the state comes from a city ordinance, so whether you owe anything depends entirely on where the rental is. This page covers the 8 cities researched for this tool: which require interest, how each one calculates it, and which require none. Each ordinance carries its own verification date, most recently July 19, 2026.

Let the tool do the math. Pick your city in the free California deposit tool and it applies that city’s own method to your dates, shows the working line by line, and folds the figure into your itemized return letter. For the cities where no rate is carried, it says so rather than printing a number it cannot stand behind.

The state rule: no interest at all

Civil Code § 1950.5 sets the 21-day deadline, the closed list of lawful deductions, the documentation duties and the penalties. It says nothing about interest, because there is no statewide requirement to pay any. That is why two landlords a mile apart can owe completely different amounts: one is inside a city that requires interest and the other is not.

Every city researched, at a glance

City	Interest owed to the tenant?	Authority
San Francisco	Required, and this tool computes it	S.F. Admin. Code § 49.2
Berkeley	Required, and this tool computes it	Berkeley Mun. Code § 13.76.070; Rent Board Regs. ch. 7
Los Angeles	Required, and this tool computes it	L.A. Mun. Code § 151.06.02
West Hollywood	Required, rate not carried here	West Hollywood Mun. Code § 17.32.020
Watsonville	Required, rate not carried here	Watsonville Mun. Code ch. 5-40
Santa Monica	No interest payment required	Santa Monica City Charter art. XVIII, § 1803(s); Rent Control Reg. 14001(a) (payment subsections 14001(b)-(f) suspended 6/22/02)
Oakland	No interest payment required	Oakland Mun. Code ch. 8.22 (no interest provision); RAP information sheet (July 8, 2024)
Hayward	No interest payment required	Hayward Mun. Code § 12-1.11 (Ord. No. 19-12, eff. July 25, 2019), repealing RRSO § 13

These are the cities researched for this tool, not every city in California. A few other rent-controlled cities have their own deposit-interest rules. If yours is not listed, check its rent board before concluding nothing is owed.

The three cities with rate tables here

Each runs a genuinely different model, which is why a single “California interest calculator” would get most of them wrong.

San Francisco

Simple interest on deposits held at least one year, citywide, whether or not the unit is rent-controlled, with one exemption: a tenancy whose rent is assisted or subsidized by a government unit, agency or authority owes none. Each completed year of the tenancy accrues at the rate in effect on that year’s move-in anniversary, not the calendar year, and the final partial year accrues at the vacate-year rate. A tenancy shorter than a year earns nothing. The current rate is 4.2%, in effect from March 1, 2026.

The deadline is the trap here. San Francisco requires the interest to be paid within two weeks of the tenant vacating, which falls before the state’s 21-day deposit deadline. A landlord who waits until day 21 to send everything has already missed it. (S.F. Admin. Code § 49.2)

Los Angeles

Coverage first, because it decides whether anything is owed at all. The Los Angeles requirement sits inside the Rent Stabilization Ordinance and reaches only units that ordinance covers, which generally means multifamily property first occupied before October 1978, with mobile home parks excluded. A Los Angeles rental outside the RSO owes no city deposit interest, and the tool asks this before it computes anything.

For covered units, the method is monthly accrual: every full calendar month the deposit was held earns that calendar year’s rate, set annually by the Rent Adjustment Commission. Interest is owed only where the deposit was held a year or more. Accrual begins November 1, 1990, and calendar year 2002 earns nothing, because the City Council suspended interest for that year. The 2026 rate is 3.03%.

A Los Angeles landlord may pay either the Commission rate or the interest the deposit actually earned, evidenced by bank statements. This tool computes the Commission rate, which is what applies when those statements are not produced. (L.A. Mun. Code § 151.06.02)

Los Angeles year	Rate
2026	3.03%
2025	4.32%
2024	0.52%
2023	0.04%
2022	0.03%
2021	0.06%
2020	0.23%
2019	0.06%

Showing the most recent 8 years. The tool carries all 37 published rates back to 1990 and computes from the full history.

Berkeley

Berkeley runs on an accrual year from November 1 to October 31, and the payment is due in December. January 31 is not the target date, it is the penalty trigger: if the payment is still outstanding after it, the tenant may deduct ten percent of the deposit itself, not ten percent of the interest, from rent that year. A tenant who leaves mid-year is paid from a separate move-out table at the trailing twelve-month rate. The 2025 rate is 0.9%.

Coverage is broader than “rent-controlled”: the ordinance reaches units fully or partially covered by the Rent Ordinance, which can include units exempt from rent ceilings under Costa-Hawkins. (Berkeley Mun. Code § 13.76.070; Rent Board Regs. ch. 7)

Berkeley is the one city here where this tool deliberately computes only part of the picture. It works out the move-out figure for departures the Board’s current move-out table covers, and it leaves the annual December payment to the Board’s own calculator rather than reproducing it. Outside that window it states the duty and no figure.

Berkeley year	Rate
2025	0.9%
2024	1.2%
2023	0.7%
2022	0.1%
2021	0%
2020	0.2%
2019	0.2%
2018	0.1%

Showing the most recent 8 years. The tool carries all 46 published rates back to 1980.

Required, but this tool will not put a number on it

Two cities require interest without this tool carrying a verified current rate, for different reasons. It says so rather than guessing, because a wrong rate is wrong money.

West Hollywood. West Hollywood requires annual interest on security deposits for rent-stabilized units. The city announces each year's rate before September 1, and payment for a calendar year is due before the following February. (West Hollywood Mun. Code § 17.32.020)
Watsonville. Watsonville requires interest citywide on security deposits over $50 held more than 30 days, with vacating tenants paid within three weeks. But the ordinance waives the payment in any year the adopted rate is below 0.50%, which has been true every year from 2011 through 2024. (Watsonville Mun. Code ch. 5-40)

The cities where no interest is owed

This is the half of the question almost nobody publishes, and getting it wrong in either direction costs someone money. Each of these was checked against the city’s own materials rather than inferred from silence.

Santa Monica. No deposit-interest payment is required, but the deposit must be held in an interest-bearing account. Santa Monica requires every security deposit, including advance rent, to sit in an interest-bearing account at a federally insured institution until it is returned to the tenant or the landlord becomes entitled to use it. The interest itself belongs to the landlord: the Charter lets the landlord keep it or use it to offset operating expenses unless and until the Rent Control Board enacts regulations directing that it be paid to the tenant, and the Board suspended those regulations in 2002 and has not reinstated them. (Santa Monica City Charter art. XVIII, § 1803(s); Rent Control Reg. 14001(a) (payment subsections 14001(b)-(f) suspended 6/22/02))
Oakland. No deposit-interest payment is required. The Oakland Rent Adjustment Program's information sheet (July 8, 2024) states that security deposits do not accrue interest, and OMC ch. 8.22 has no interest provision. (Oakland Mun. Code ch. 8.22 (no interest provision); RAP information sheet (July 8, 2024))
Hayward. No ongoing deposit-interest payment is required. Hayward did require annual interest under section 13 of its 1983 Residential Rent Stabilization Ordinance, but Ordinance No. 19-12 repealed and replaced that ordinance effective July 25, 2019, and the replacement defers security deposits entirely to state law, which requires no interest. Interest stopped accruing on July 25, 2019; a tenancy that ran in a covered building before that date may still have unpaid interest owing for its pre-repeal anniversary years. (Hayward Mun. Code § 12-1.11 (Ord. No. 19-12, eff. July 25, 2019), repealing RRSO § 13)

Santa Monica, one duty survives. No interest is payable to the tenant, but for units the Rent Control Board reaches, meaning controlled rental units rather than every rental in the city, the deposit itself and any advance rent must still be held in an interest-bearing account at a federally insured institution. The FSLIC named in the text was folded into the FDIC in 1989, so in practice that means an FDIC-insured account. The interest belongs to you and may be kept or used to offset operating expenses. It is easy to miss because the Rent Control Board’s own security deposit information sheet does not mention it.

Be careful with older summaries on this topic. Several law firm and landlord association pages still list Santa Monica as a city that requires deposit interest; they are describing the regime that ran from 1999 until the Board suspended it in 2002. Hayward is the same story with a different date: its requirement was real until Ordinance 19-12 repealed it on July 25, 2019. Interest that accrued in Hayward before that date is a separate question, and one this tool does not compute.

Your city is not on the list

California state law on its own requires no deposit interest, so most cities owe none. But the cities that do require it are mostly rent-controlled cities, and only the ones above have been researched here. Check your local rent board before assuming nothing is owed, and if you find one worth adding, tell us and it will be verified against the ordinance.

Work out a California return

The free California deposit tool computes the 21-day deadline, the deduction rules and any city interest, and generates a statute-cited return letter. For what can and cannot be charged, see wear and tear vs. damage in California.

About this page

Every city entry above was checked against that city’s own ordinance, regulations or rent board materials, not against a summary, and each carries its own verification date in the sources below. The rates shown are read from the same records the calculator uses, so the page and the arithmetic cannot drift apart. Where a duty is real but the current rate is not verified, the tool states the duty and no figure. How we verify the law explains the process. This is general information that cites the law, not legal advice, and Orygn LLC is not a law firm.

California deposit interest: common questions

Does California require landlords to pay interest on a security deposit?

No. Civil Code section 1950.5 sets the 21-day deadline, the deduction rules and the penalties, but it contains no interest requirement at all. Every interest obligation in California comes from a city ordinance, so whether you owe interest depends entirely on where the rental is.

Which California cities require security deposit interest?

Of the cities researched for this tool, San Francisco, Berkeley, Los Angeles, West Hollywood and Watsonville require it, while Santa Monica, Oakland and Hayward require none. That is not a complete list of California cities. A handful of other rent-controlled cities have their own rules, so if your city is not covered here, check its rent board before assuming nothing is owed.

How is San Francisco deposit interest calculated?

San Francisco pays simple interest on deposits held at least one year, citywide, whether or not the unit is rent-controlled. Each completed year of the tenancy accrues at the rate in effect on that year’s move-in anniversary, not the calendar year, and the final partial year accrues at the vacate-year rate. A tenancy shorter than one year earns nothing.

When does San Francisco interest have to be paid?

Within two weeks of the tenant vacating. That is worth noticing because it lands before the state’s 21-day deposit deadline, so a San Francisco landlord who waits until day 21 to send everything has already missed the interest deadline.

How is Los Angeles deposit interest calculated?

Los Angeles accrues monthly: every full calendar month the deposit was held earns that calendar year’s rate, set annually by the Rent Adjustment Commission. Interest is owed only where the deposit was held a year or more. Accrual starts November 1, 1990, and calendar year 2002 earns nothing because the City Council suspended interest for that year.

Can a Los Angeles landlord pay the actual interest the account earned instead?

Yes. The ordinance lets a landlord pay either the Rent Adjustment Commission rate or the interest the deposit actually earned, evidenced by bank statements. This tool computes the Commission rate, which is what applies when a landlord does not produce those statements.

How does Berkeley deposit interest work?

Berkeley runs on an accrual year from November 1 to October 31 and the payment is due in December. If it is still unpaid after January 31, the tenant may deduct ten percent of the deposit itself, not ten percent of the interest, from rent that year. A tenant who moves out mid-year is paid from a separate move-out table at the trailing twelve-month rate.

Does Santa Monica require deposit interest?

No payment is owed to the tenant. The Rent Control Board suspended the regulations that directed payment back in 2002 and has never reinstated them. But a separate duty is still live and is easy to miss: the deposit itself, and any advance rent, must be held in an interest-bearing account at a federally insured institution. The interest belongs to the landlord, who may keep it or use it to offset operating expenses.

Does Hayward still require deposit interest?

Not for anything after July 25, 2019. Hayward did require it under section 13 of its old Residential Rent Stabilization Ordinance, but Ordinance 19-12 repealed and replaced that ordinance on that date, and the replacement defers security deposits to state law, which requires no interest. The City states this in its own landlord guidance. Interest that had already accrued before the repeal is a separate question this tool does not compute.

Why does this tool refuse to give a number for some cities?

Because a wrong rate is wrong money. West Hollywood and Watsonville both require interest, but this tool does not carry a verified current rate for either, so it states the duty and points at the city rather than guessing. Watsonville is a special case: its ordinance waives the payment entirely in any year the adopted rate falls below one half of one percent, which has been true every year from 2011 through 2024.