Does a landlord have to pay interest on a security deposit in Connecticut?
Connecticut requires every residential landlord to pay interest on a security deposit each year, at not less than the deposit index the Banking Commissioner publishes for that calendar year, which is 0.49% for 2026.
Cited to Conn. Gen. Stat. § 47a-21 (security deposits; the interest duty) (i) and 10 more cited sources · Verified August 28, 2026
Interest is paid to the tenant or credited against the next rent on the anniversary of the tenancy and annually after that, at the landlord's choice, and it compounds annually. If the tenancy ends between anniversaries, or the landlord hands back the deposit early, the accrued interest is due within 21 days. The duty covers mobile manufactured home owners and park owners as well as ordinary landlords, and the one exclusion is student housing an educational institution owns or controls for its own students. A tenant loses interest for any month in which rent ran more than ten days late — unless the landlord charged a late fee for that month, which restores it. Widely repeated claims that Connecticut guarantees at least 1.5% are out of date: that floor came out of the rental deposit rule for years beginning in 2012.
Connecticut deposit interest at a glance
| Interest owed to the tenant | Yes — required by statute |
|---|---|
| How the rate is set | A figure announced on a published cycle |
| Current figure | 0.49% for calendar year 2026, announced by the Banking Commissioner |
| Rate rules | For every calendar year from 2012 forward, § 47a-21(i) sets the rate at "not less than the deposit index, as defined in section 36a-26, for that year." The deposit index is the average of the national rates for savings deposits and money market deposits for the last week in November of the prior year, as published by the Federal Deposit Insurance Corporation under 12 CFR 337.6, with a fallback to substantially similar national rates published by a federal banking agency if the FDIC stops publishing them. The Banking Commissioner must determine the index for each calendar year and publish it in the Department of Banking's news bulletin and on the department's website by December 15 of the prior year. Because the statute says "not less than," the published figure is a floor: a landlord may pay more, never less. Interest compounds annually — § 47a-21(a)(1) defines accrued interest as the interest due under subsection (i), "compounded annually to the extent applicable." Two different published series exist and they are not interchangeable. The rate a landlord owes is the applied rental rate; the deposit index is the raw figure the Commissioner determines. They are the same number from 2012 forward, but for calendar years 2004 through 2011 the statute carried a 1.5% minimum that was far above the index, so the rate owed for those years is 1.5% and the index figure understates it several times over. The rate is set per calendar year while interest is paid per tenancy year, so a tenancy year that crosses a December 31 spans two published rates. Neither § 47a-21(i) nor § 36a-26 states how to apportion the two. |
| Accrual and payment | Interest is paid to the tenant or credited toward the next rent payment "on the anniversary date of the tenancy and annually thereafter" — not at the end of the calendar year and not at the end of the lease. The choice between cash and rent credit belongs to the landlord; the tenant has no election. If the tenancy ends before the anniversary date, or the landlord returns all or part of the deposit before termination, accrued interest is due not later than 21 days after that termination or return. P.A. 23-207 shortened that deadline from 30 days, and many circulating summaries still say 30. One month at a time can be forfeited: "Interest shall not be paid to a tenant for any month in which the tenant has been delinquent for more than ten days in the payment of any monthly rent, unless the landlord imposes a late charge for such delinquency." The unit is the month, not the year; the trigger is delinquency of more than ten days on any monthly rent; and imposing a late charge restores that month's interest, so a landlord cannot both charge a late fee and withhold the interest for the same month. The statute does not say how a forfeited month interacts with annual compounding, and no Connecticut appellate decision resolves it. Where a deposit is paid in installments under § 47a-22a — housing-authority and approved corporation housing for senior citizens and people with disabilities — interest does not begin to accrue until the deposit, including every installment due, has been paid in full. A landlord may not raise the rent because of the interest duty: subsection (i) closes with "No landlord shall increase the rent due from a tenant because of the requirement that the landlord pay on interest the security deposit." |
| Who and what is covered | The duty reaches every residential landlord and, expressly, every landlord or owner of a mobile manufactured home or of a mobile manufactured home space, lot or park as those terms are defined in § 21-64. One exclusion is written into subsection (i): a landlord of a residential unit in a building owned or controlled by an educational institution and used by that institution to house its students and their families owes no deposit interest. |
| Statute controls where or how the deposit is held | Yes |
| Interest-bearing account required | No statute addresses whether the account must bear interest |
| Custody rules | Deposits are subject to the escrow-account duties of § 47a-21(h), which carry their own criminal exposure: § 47a-21(k)(2) makes a knowing and wilful violation of subsection (h) punishable by a fine of up to $500 or up to 30 days, or both, for each offense, with an affirmative defense for a landlord who at the time leased to fewer than four tenants who paid a security deposit. What the account itself earns is a separate question from what the tenant is owed: the tenant's interest is the published index figure for the year, whatever the account pays. |
| Penalty for violation | Two remedies reach an interest failure, and the administrative route is closed to the commonest one. Civil, § 47a-21(d)(2): a landlord who violates the return duty is liable for twice the deposit, "except that, if the only violation is the failure to deliver the accrued interest, such landlord shall be liable for ten dollars or twice the amount of the accrued interest, whichever is greater." An interest-only failure at termination is therefore carved out of the twice-the-deposit measure and comes down to the greater of $10 or twice the interest — the $10 floor matters because twice a fraction of a percent is often trivial. Section 47a-21(g) gives the tenant an action in replevin or for money damages. Criminal, § 47a-21(k)(3): a landlord who knowingly and wilfully violates subsection (i) at the time an interest payment is due is subject to a fine of not more than $100 for each offense. It is a maximum, not a fixed sum, and it is a fine — it is not paid to the tenant. No administrative remedy for missed annual interest: § 47a-21(j)(2)(A) states that the Banking Commissioner "shall not have jurisdiction over … the failure of a landlord to pay interest to a tenant annually under subsection (i) of this section," even though subsection (j)(1) otherwise lists subsection (i) among the complaints the Commissioner may investigate. |
| Local rules | None noted for this state |
Cite this page: "Landlord Atlas, Connecticut Security Deposit Interest Laws (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/connecticut/" — free to cite and quote with a link (how these records are verified). Everything above is cited in the citations section below.
Calculate Connecticut security deposit interest — free, no signup, built on the same verified Connecticut law as this page.
Published rate tables
Rental security deposit interest rate applied under § 47a-21(i)
The rate a Connecticut landlord actually owes for each calendar year, as the Department of Banking publishes it on its rate page and in its schedule of previous interest rates. From 2012 forward the figure is the deposit index. For 2002 through 2011 it is the 1.5% statutory minimum that then applied, which for 2004 through 2011 sat well above the index — those are the years where using the index instead of this column understates what a tenant is owed. Rows before 1994 are the windows the Department's own schedule states, and the pre-2004 figures cover mortgage escrow and utility deposits at the same rate as tenant deposits.
| Period | Rate | Note |
|---|---|---|
| October 1, 1973 – September 30, 1982 | 4% | |
| October 1, 1982 – September 30, 1992 | 5.25% | |
| October 1, 1992 – June 30, 1993 | 4% | |
| July 1, 1993 – December 31, 1993 | 2.9% | The Department of Banking's schedule lists 2.9% for 1993 alongside a separate window running through June 30, 1993 at 4.0%; the Department's own interest-calculation spreadsheet (its published calculation table, updated through 2026) resolves the overlap, carrying this 2.9% figure for July 1 through December 31, 1993 as its own row beside the 4.0% window ending June 30, 1993. |
| calendar year 1994 | 2.5% | |
| calendar year 1995 | 2.8% | |
| calendar year 1996 | 3.1% | |
| calendar year 1997 | 2.8% | |
| calendar year 1998 | 2.6% | |
| calendar year 1999 | 2.3% | |
| calendar year 2000 | 2.2% | |
| calendar year 2001 | 2.4% | |
| calendar year 2002 | 1.5% | |
| calendar year 2003 | 1.5% | The Department of Banking's schedule lists 1.5% for 2002 and 2003; the separate deposit index series begins with 2004. |
| calendar year 2004 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2004 was 0.55%. |
| calendar year 2005 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2005 was 0.53%. |
| calendar year 2006 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2006 was 0.76%. |
| calendar year 2007 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2007 was 0.94%. |
| calendar year 2008 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2008 was 0.94%. |
| calendar year 2009 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2009 was 0.60%. |
| calendar year 2010 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2010 was 0.34%. |
| calendar year 2011 | 1.5% | The 1.5% statutory floor governs this year; the deposit index the Banking Commissioner published for 2011 was 0.28%. |
| calendar year 2012 | 0.16% | First year after the 1.5% floor was removed from the interest duty by P.A. 11-94, § 1, effective January 1, 2012. |
| calendar year 2013 | 0.11% | |
| calendar year 2014 | 0.09% | |
| calendar year 2015 | 0.08% | |
| calendar year 2016 | 0.08% | |
| calendar year 2017 | 0.08% | |
| calendar year 2018 | 0.09% | |
| calendar year 2019 | 0.15% | |
| calendar year 2020 | 0.15% | |
| calendar year 2021 | 0.08% | |
| calendar year 2022 | 0.06% | |
| calendar year 2023 | 0.27% | |
| calendar year 2024 | 0.55% | |
| calendar year 2025 | 0.52% | |
| calendar year 2026 | 0.49% |
A current series — the Banking Commissioner, each December for the following calendar year (§ 36a-26 sets a December 15 publication deadline). Source: official source · verified August 28, 2026.
Deposit index published under § 36a-26
The raw index figure the Banking Commissioner determines each year from the Federal Deposit Insurance Corporation's national savings and money market rates for the last week in November of the prior year. From calendar year 2012 it is also the rate owed on a rental security deposit. For 2004 through 2011 it is not: the statutory 1.5% minimum then in force was higher, so this series is the wrong column for a pre-2012 tenancy year. The published index begins with 2004.
| Period | Rate | Note |
|---|---|---|
| calendar year 2004 | 0.55% | The rate actually owed on a rental security deposit for 2004 was the 1.5% statutory floor, not this figure. |
| calendar year 2005 | 0.53% | The rate actually owed on a rental security deposit for 2005 was the 1.5% statutory floor, not this figure. |
| calendar year 2006 | 0.76% | The rate actually owed on a rental security deposit for 2006 was the 1.5% statutory floor, not this figure. |
| calendar year 2007 | 0.94% | The rate actually owed on a rental security deposit for 2007 was the 1.5% statutory floor, not this figure. |
| calendar year 2008 | 0.94% | The rate actually owed on a rental security deposit for 2008 was the 1.5% statutory floor, not this figure. |
| calendar year 2009 | 0.6% | The rate actually owed on a rental security deposit for 2009 was the 1.5% statutory floor, not this figure. |
| calendar year 2010 | 0.34% | The rate actually owed on a rental security deposit for 2010 was the 1.5% statutory floor, not this figure. |
| calendar year 2011 | 0.28% | The rate actually owed on a rental security deposit for 2011 was the 1.5% statutory floor, not this figure. |
| calendar year 2012 | 0.16% | |
| calendar year 2013 | 0.11% | |
| calendar year 2014 | 0.09% | |
| calendar year 2015 | 0.08% | |
| calendar year 2016 | 0.08% | |
| calendar year 2017 | 0.08% | |
| calendar year 2018 | 0.09% | |
| calendar year 2019 | 0.15% | |
| calendar year 2020 | 0.15% | |
| calendar year 2021 | 0.08% | |
| calendar year 2022 | 0.06% | |
| calendar year 2023 | 0.27% | |
| calendar year 2024 | 0.55% | |
| calendar year 2025 | 0.52% | |
| calendar year 2026 | 0.49% |
A current series — the Banking Commissioner, each December for the following calendar year (§ 36a-26 sets a December 15 publication deadline). Source: official source · verified August 28, 2026.
Notes and caveats
- The 1.5% minimum that no longer applies to rent deposits — "Connecticut landlords must pay at least 1.5%" is false for any tenancy year beginning on or after January 1, 2012. P.A. 11-94, § 1 deleted the 1.5% minimum from the interest duty effective that date, and P.A. 12-96, § 32 then rewrote the subsection so that the surviving words "except in no event shall the rate be less than one and one-half per cent" govern only the measure that applied from July 1 through December 31, 1993. Two things keep the misquote alive: that residual sentence still sits in the current text of § 47a-21(i), and a different statute — § 16-262j(c), covering utility, telecommunications and electric supplier customer deposits — really does still carry a 1.5% floor, which is why the Department of Banking's 2026 table shows 1.5% on one line and 0.49% on the rental line. For calendar years 2002 through 2011 the 1.5% figure was correct for rental deposits, so older tenancy years genuinely compute at 1.5%.
- Two rate series, and the one that costs money to confuse — The Department of Banking publishes both the deposit index and the rate actually applied to rental deposits. They match from 2012 on. For 2004 through 2011 they do not: the index ran 0.28% to 0.94% while the rate owed was the 1.5% floor, so a calculation keyed to the index for those years can understate the tenant's interest by three to five times.
- Where the doubling remedy actually lives — Sources that cite § 47a-21(k) for a doubling remedy are citing the wrong subsection. Subsection (k) contains only fines — $250, $500 and $100 — and a carve-out for financial institutions. The twice-the-deposit remedy, and the interest-specific measure of the greater of $10 or twice the accrued interest, are both in § 47a-21(d)(2).
- The Banking Commissioner cannot take a missed-interest complaint — Section 47a-21(j)(2)(A) removes from the Commissioner's jurisdiction "the failure of a landlord to pay interest to a tenant annually." The Department of Banking is the obvious place to complain and is expressly unavailable for the most common interest violation; the routes that remain are a civil action at termination under § 47a-21(d)(2) and (g), or a criminal referral under (k)(3).
- Mobile manufactured homes are inside the duty — Subsection (i) names landlords and owners of mobile manufactured homes and of mobile manufactured home spaces, lots and parks alongside ordinary landlords, using the definitions in § 21-64. Deposit interest in Connecticut is not an apartment-only rule.
- A typographical artifact in the official text — The last sentence of § 47a-21(i) reads "the requirement that the landlord pay on interest the security deposit" in the official text. It is a long-standing wording artifact in the published statute, not a transcription slip, and its plain sense is the requirement to pay interest on the deposit. Quote it as printed or paraphrase it; do not present a silently corrected version as the statute.
- Pin cites with subdivisions are stale — Subsection (i) has no numbered subdivisions today. The former (i)(2), which defined the deposit index inside § 47a-21 itself, was moved to § 36a-26 by P.A. 16-65. Anything citing "§ 47a-21(i)(1)" or "(i)(2)" is describing the structure the statute had before 2016.
- Twenty-one days, not thirty — Interest owed because a tenancy ended between anniversaries, or because the landlord returned the deposit early, is due within 21 days. P.A. 23-207 cut the old 30-day window in 2023, and secondary summaries still carry the old number.
- A tenancy year that crosses January 1 — The rate is set by calendar year; interest is paid on the tenancy's anniversary. When those two calendars disagree — the usual case — the statute and the deposit index section are both silent on how to split the year between the two published rates. The Department of Banking links an interest calculation table from its rate page.
Common questions: Connecticut deposit interest
Each answer is the verified value from the table above, restated as a direct answer. Free to quote with a link to this page.
- What is the Connecticut security deposit interest rate right now?
- 0.49% for calendar year 2026, announced by the Banking Commissioner. For every calendar year from 2012 forward, § 47a-21(i) sets the rate at "not less than the deposit index, as defined in section 36a-26, for that year." The deposit index is the average of the national rates for savings deposits and money market deposits for the last week in November of the prior year, as published by the Federal Deposit Insurance Corporation under 12 CFR 337.6, with a fallback to substantially similar national rates published by a federal banking agency if the FDIC stops publishing them.
- When must a landlord pay or credit deposit interest in Connecticut?
- Interest is paid to the tenant or credited toward the next rent payment "on the anniversary date of the tenancy and annually thereafter" — not at the end of the calendar year and not at the end of the lease. The choice between cash and rent credit belongs to the landlord; the tenant has no election.
- Does the deposit have to be in an interest-bearing account in Connecticut?
- No statute addresses whether the account must bear interest. Deposits are subject to the escrow-account duties of § 47a-21(h), which carry their own criminal exposure: § 47a-21(k)(2) makes a knowing and wilful violation of subsection (h) punishable by a fine of up to $500 or up to 30 days, or both, for each offense, with an affirmative defense for a landlord who at the time leased to fewer than four tenants who paid a security deposit. What the account itself earns is a separate question from what the tenant is owed: the tenant's interest is the published index figure for the year, whatever the account pays.
- What happens if a landlord does not pay deposit interest in Connecticut?
- Two remedies reach an interest failure, and the administrative route is closed to the commonest one. Civil, § 47a-21(d)(2): a landlord who violates the return duty is liable for twice the deposit, "except that, if the only violation is the failure to deliver the accrued interest, such landlord shall be liable for ten dollars or twice the amount of the accrued interest, whichever is greater."
- Do any cities or counties in Connecticut have their own deposit-interest rules?
- None noted for this state.
Citations
- Conn. Gen. Stat. § 47a-21 (security deposits; the interest duty) · (i) (verified 2026) Official source
- Conn. Gen. Stat. § 47a-21 (compounding, in the definition of accrued interest) · (a)(1) (verified 2026) Official source
- Conn. Gen. Stat. § 47a-21 (return of the deposit; the interest-only civil remedy) · (d)(2) (verified 2026) Official source
- Conn. Gen. Stat. § 47a-21 (no Banking Commissioner jurisdiction over annual interest) · (j)(2)(A) (verified 2026) Official source
- Conn. Gen. Stat. § 47a-21 (penalties; the $100 interest fine) · (k)(3) (verified 2026) Official source
- Conn. Gen. Stat. § 47a-22a (installment deposits; when accrual starts) · (b) (verified 2026) Official source
- Conn. Gen. Stat. § 36a-26 (deposit index) (verified 2026) Official source
- Conn. Gen. Stat. § 16-262j (utility, telecommunications and electric supplier deposits; the surviving 1.5% floor) · (c) (verified 2026) Official source
- Connecticut Department of Banking, deposit index and interest rates (verified 2026) Official source
- Connecticut Department of Banking, schedule of previous interest rates (updated December 2025) (verified 2026) Official source
- Banking Commissioner announces the 2026 deposit index (December 9, 2025) (verified 2026) Official source
How this record was verified: Direct read of Conn. Gen. Stat. chapter 831 (§§ 47a-21, 47a-22 and 47a-22a) in the General Assembly's published chapter text revised to January 1, 2026, with § 47a-21 subsections (a)(1), (d)(2), (i), (j) and (k) read in full and the section's official history notes read for Public Acts 11-94, 12-96, 16-65 and 23-207; § 36a-26 read in chapter 664a and § 16-262j read in chapter 283 for the separate utility and telecommunications deposit floor; and, on the Department of Banking's site, the deposit index and interest rate page, the four-page schedule of previous interest rates updated December 2025, and the Banking Commissioner's announcement of the 2026 deposit index dated December 9, 2025.