Mount Prospect Security Deposit - When Does the Landlord Needs to Give Interest?

If a tenant lives in Mount Prospect and the Mount Prospect Residential Landlord and Tenant Regulations apply, the landlord needs to follow certain rules when the tenant pays a security deposit.   

When Does a Security Deposit Accrue Interest?

If a tenant lives in a building with twenty-four (24) units or fewer, the security deposit does NOT earn interest. 

If a tenant lives in a building with twenty-five (25) or more units, the landlord must pay interest.

If the tenant owes rent, then the landlord does not need to give interest. 

How Is Interest Paid?

• Rate: The interest rate is based on what the largest Illinois bank pays for savings accounts as of December 31 before the lease starts. For 2024, the interest rate is 0.005%. For an interest rate of 0.005% and a $1,000.00 security deposit, a landlord would have to give $0.05 after a 12-month period. 
• Payment schedule:
  • Annually: If the interest is $5 or more for one year, landlords must pay interest within 30 days of the rental anniversary.
  • At the end of the lease: Any remaining unpaid interest must be paid when the lease ends.
  • Payments can be made as cash or as a credit toward your rent.

What Happens If the Landlord Doesn’t Pay?

• If a landlord willfully refuses to pay interest, you can take them to court. If they are found guilty, they may owe:
  • The amount of your security deposit as a penalty.
  • Court costs and attorney’s fees.