Does the deposit have to be in an interest-bearing account in Delaware?

No statute addresses whether the account must bear interest. Every security deposit must be placed in an escrow bank account at a federally-insured banking institution with an office that accepts deposits within Delaware. The account must be designated as a security deposits account and "shall not be used in the operation of any business by the landlord", and the landlord must disclose the account's location to the tenant.

What happens if a landlord does not pay deposit interest in Delaware?

No penalty reaches deposit interest, because no interest is owed. The account duty carries its own sanctions.

Does a landlord have to pay interest on a security deposit in Delaware?

Verified August 28, 2026 All Delaware topics →

Legislative changes ahead — not yet in force. This page reflects the law in force today. The following measure would change Delaware's landlord-tenant law:

SB 292 (153rd GA, 2026) — 'Grace Peterson Act' — Amends the Residential Landlord-Tenant Code to (1) close the 25 Del. C. § 5102 exclusion loophole that let unlicensed or uncertified residential operators claim exemption from the Code, including eviction procedure, and (2) add § 5512A duties when a tenant's rent is paid from a state reentry-services fund (landlord must assist with a discharge plan and notify the fund administrator and agencies before terminating; noncompliance brings one-year debarment from state funds; affected tenants may stay on without fund payments or terminate on 30-60 days' notice). Takes effect 6 months after enactment. Status: Passed both chambers 2026-06-24 and sent to the Governor. As of 2026-09-05 the General Assembly's bill record (LegislationId 143172) still shows Ready for Governor with no volume or chapter number — 73 days on the desk. Delaware routinely completes action on end-of-session bills for weeks after adjournment, and the published chapter register itself runs about ten weeks behind, so the bill is treated as still awaiting final action; if the constitutional post-adjournment window has instead let it become law without a signature, the chapter register will show it, and that register is checked weekly. Not shown as law anywhere as of 2026-09-05. If enacted it changes Code-applicability notes (§ 5102) and adds § 5512A pre-termination duties for reentry-fund tenancies; it changes no figure shown here. (checked September 5, 2026).

Delaware does not require landlords to pay tenants interest on a security deposit, and no section of its landlord-tenant law addresses deposit interest at all.

Cited to 25 Del. C. § 5514 (security deposit — escrow account, disclosure, penalties) (a)(3), (b), (g) and 1 more cited source · Verified August 28, 2026

What Delaware does require is custody: the deposit must sit in an escrow bank account at a federally-insured banking institution with a Delaware office, designated as a security deposits account, not used in the landlord's business, and its location disclosed to the tenant (§ 5514(b)). Three claims about Delaware circulate widely and none of them is the law. Deposits do not begin earning interest "after one year" — the one-year mark in the statute is a deposit cap: for a month-to-month or undefined-term primary residence that has lasted a year, the landlord must immediately return, as a credit to the tenant, any deposit above one month's rent (§ 5514(a)(3)). The escrow account is not required to be interest-bearing; that phrase appears nowhere in chapter 55. And the penalty is not one percent a month — it is a doubling.

Delaware deposit interest at a glance

Interest owed to the tenant	No — no statute addresses it
How the rate is set	No rate exists — there is no interest duty
Current figure	No published figure exists
Rate rules	No rate rules — no duty exists
Accrual and payment	No payment duty exists
Who and what is covered	No statutory conditions stated — see the summary and notes
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	Every security deposit must be placed in an escrow bank account at a federally-insured banking institution with an office that accepts deposits within Delaware. The account must be designated as a security deposits account and "shall not be used in the operation of any business by the landlord", and the landlord must disclose the account's location to the tenant. The deposit principal is "held and administered for the benefit of the tenant", and the tenant's claim to the money comes ahead of any creditor of the landlord, including a trustee in bankruptcy, "even if such money is commingled" (§ 5514(b)). Pet deposits are subject to the same account rule (§ 5514(i)(1)). Nothing in the section requires the account to bear interest, and the words "interest-bearing" appear nowhere in chapter 55.
Penalty for violation	No penalty reaches deposit interest, because no interest is owed. The account duty carries its own sanctions. A landlord who fails to disclose the location of the deposit account within 20 days of a tenant's written request, or who fails to deposit the money in a federally-insured financial institution with a Delaware office, forfeits the security deposit to the tenant, and failing to return the full deposit within 20 days of the effective date of that forfeiture entitles the tenant to double the amount of the deposit (§ 5514(g)(2)). Failing to remit the deposit, or the difference between it and an itemized list of damages, within 20 days of the end of the rental agreement entitles the tenant to double the amount wrongfully withheld (§ 5514(g)(1)).
Local rules	None noted for this state

Cite this page: "Landlord Atlas, Delaware Security Deposit Interest Laws (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/delaware/" — free to cite and quote with a link (how these records are verified). Everything above is cited in the citations section below.

Check the verified Delaware answer — and every state and city that differs — in the deposit interest calculator — free, no signup, built on the same verified Delaware law as this page.

Notes and caveats

The account rule, exactly — Section 5514(b) reads: "Each security deposit shall be placed by the landlord in an escrow bank account in a federally-insured banking institution with an office that accepts deposits within the State. Such account shall be designated as a security deposits account and shall not be used in the operation of any business by the landlord. The landlord shall disclose to the tenant the location of the security deposit account." It names the institution and the account's designated purpose. It attaches no condition to what the account earns.
Where "interest after one year" comes from — The claim that Delaware tenants earn interest after a year has no textual basis, and its likely origin is a misreading of the deposit cap. Section 5514(a)(3) provides that for primary residential tenancies of undefined term or month to month lasting a year or more, "[a]fter the expiration of 1 year, the landlord shall immediately return, as a credit to the tenant, any security deposit amount in excess of 1 month's rent". That is a return of over-collected principal, not interest. The only other one-year reference in the section is the deadline in § 5514(h) for a tenant who never gave a forwarding address to claim the unused portion in writing.
"Interest-bearing escrow" is half right, and the operative half is wrong — Delaware requires an escrow account. It does not require an interest-bearing one. The words "interest-bearing" do not appear in § 5514, in § 5514A, or anywhere in chapter 55. The three questions have three different answers here: the deposit must be held apart (yes), the account must bear interest (no), and the tenant is owed interest (no).
The penalty is a doubling, not one percent a month — There is no percentage, no monthly accrual and no interest-based penalty anywhere in § 5514. The remedies are doublings: double the amount wrongfully withheld under § 5514(g)(1), and forfeiture of the deposit followed by double the deposit under § 5514(g)(2). A separate doubling applies to an over-charged application fee under § 5514(d).
The tenant's claim survives commingling — The last clause of § 5514(b) gives the tenant's claim priority over any creditor of the landlord, including a trustee in bankruptcy, "even if such money is commingled". The protection therefore attaches to the money regardless of whether the landlord obeyed the segregation duty. It is a priority rule, and it is easy to mistake for an earnings entitlement when summarised loosely. It is not one.
Currency — Section 5514's printed credit line ends at 79 Del. Laws, c. 57, § 4 (2013), and no later amendment credit is printed. The 2026 measure amending Title 25 that has drawn attention — Senate Substitute No. 1 for Senate Bill No. 116, on the right of redemption — amends § 5502 only and does not touch the deposit section.

Common questions: Delaware 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 Delaware security deposit interest rate right now?: No published figure exists.
When must a landlord pay or credit deposit interest in Delaware?: No payment duty exists.
Does the deposit have to be in an interest-bearing account in Delaware?: No statute addresses whether the account must bear interest. Every security deposit must be placed in an escrow bank account at a federally-insured banking institution with an office that accepts deposits within Delaware. The account must be designated as a security deposits account and "shall not be used in the operation of any business by the landlord", and the landlord must disclose the account's location to the tenant.
What happens if a landlord does not pay deposit interest in Delaware?: No penalty reaches deposit interest, because no interest is owed. The account duty carries its own sanctions.
Do any cities or counties in Delaware have their own deposit-interest rules?: None noted for this state.

Citations

25 Del. C. § 5514 (security deposit — escrow account, disclosure, penalties) · (a)(3), (b), (g) (verified 2026) Official source
25 Del. C. § 5514A (surety bond a tenant may purchase instead of paying a deposit) · (a), (b) (verified 2026) Official source

How this record was verified: Direct read of 25 Del. C. § 5514, the security-deposit section, in full — all of subsections (a) through (j) — together with § 5514A (the tenant-purchased surety bond) and the whole of chapter 55, §§ 5501 through 5516, on the Delaware Code site; chapter 51 subchapters I and II, including the definitions of "security deposit" and "surety bond fee or premium", and chapter 53 read alongside them, with every occurrence of "interest", "escrow", "interest-bearing", "accrue", "per annum" and "account" in all four examined in context (chapter 55 carries two occurrences of "interest", both property-sense, and one of "escrow", the account sentence itself); and the official text of Senate Substitute No. 1 for Senate Bill No. 116 of the 153rd General Assembly read in full, which amends only § 5502 and contains no occurrence of 5514 and none of "interest".