Evanston (RLTO) Security Deposit - When the Landlord Needs to Give Interest?
If a tenant lives in Evanston and the Evanston Residential Landlord and Tenant Ordinance (RTLO) applies, the landlord needs to follow certain rules when the tenant pays a security deposit.
When does a tenant's security deposit start to earn interest?
After a tenant pays a security deposit, the landlord must pay interest to the tenant after the tenant has lived at the property for more than six months.
- A security deposit does not start earning interest until the landlord receives the full security deposit amount.
The landlord must pay the tenant any interest within 30 days after the end of each 12-month period by cash OR credit to the rent due.
- The interest can be paid by cash or credit applied to the rent due.
- If the tenant owes rent, then the landlord does not need to give interest.
How much interest does the landlord need to pay?
It depends on the year and the rate that the City of Chicago sets. The rate of interest on security deposits under leases from January 1 through December 31, 2024 is 0.01%. For a full list of the interest rates, visit the City of Chicago's website here.
Rates for previous years
| 2021 | 0.01 % |
| 2020 | 0.01 % |
| 2019 | 0.01 % |
| 2018 | 0.01 % |
| 2017 | 0.01 % |
Examples of Calculating Interest |
| Example 1 | A tenant pays a $1000 security deposit on January 1, 2019. After six months, on July 1, 2019, the tenant’s security deposit starts to accrue interest at the 2019 rate of 0.01%. 0.01% of $1000 is $0.10. That means the tenant would be entitled to $0.10 either in cash or credit applied to their rent. Because the interest rate was 0.01% for 2020, 2021, and 2022, the landlord must give $0.10 as interest every year. |
| Example 2 | A tenant pays a $1000 security deposit on July 1, 2013. After six months, on January 1, 2014, the tenant’s security deposit starts to accrue interest at the 2014 rate of 0.013% instead of the 2013 rate of 0.023%. 0.013% of $1000 is $0.13. That means the tenant would be entitled to $0.10 either in cash or credit applied to their rent. Starting in 2015, the interest rate has been 0.01%. Then, the landlord must give $0.10 as interest every year. |
What happens if the landlord didn't give interest?
The Evanston RLTO does not punish a landlord for collecting a bigger security deposit. If a tenant has any questions or concerns about their security deposit, it's best to speak with the landlord or consult with a legal professional.
The above article provides information about legal issues but is not the same as legal advice. Legal advice is when a lawyer applies the law to your specific situation. The information in this article does not replace the advice or representation of a licensed attorney. Law Center for Better Housing cannot guarantee the accuracy or completeness of the information in this article and is not responsible for any consequences that may result from using it. You should consult with a licensed attorney to ensure the information in this article is appropriate for your specific situation. Using the information in this article does not create a relationship between Law Center for Better Housing and you as your attorney