Chicago (RLTO) Security Deposit - How to Calculate Interest?
If a tenant lives in Chicago and the Chicago Residential Landlord Tenant Ordinance (RLTO) applies, the landlord needs to follow certain rules when the tenant pays a security deposit. A landlord will need to pay interest after the tenant has lived in the unit for more than 6 months.
Interest Rates for Previous Years
The interest 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.
| 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. |
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