What is the Illinois security deposit interest rate right now?

0.005% for leases beginning in calendar year 2026 — the rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2025, announced by the Illinois Department of Financial and Professional Regulation. Section 1 pegs the rate to "the interest paid by the largest commercial bank, as measured by total assets, having its main banking premises in this State on minimum deposit passbook savings accounts as of December 31 of the calendar year immediately preceding the inception of the rental agreement." Two consequences follow.

When must a landlord pay or credit deposit interest in Illinois?

Interest is "computed from the date of the deposit," so once the duty is triggered it runs from day one rather than from the seventh month. Within 30 days after the end of each 12-month rental period the lessor must pay any interest that has accumulated to $5 or more, in cash or as a credit applied to rent due, except when the lessee is in default under the lease.

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

No statute addresses whether the account must bear interest.

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

A lessor "who willfully fails or refuses to pay the interest required by this Act shall, upon a finding by a circuit court that he has willfully failed or refused to pay, be liable for an amount equal to the amount of the security deposit, together with court costs and reasonable attorneys fees" (§ 2). The measure is the whole deposit, not the unpaid interest, so on a rate of thousandths of a percent the exposure dwarfs the sum in dispute — but it takes a court finding of willfulness, and the Act provides nothing for a non-willful failure beyond the interest itself.

Do any cities or counties in Illinois have their own deposit-interest rules?

Chicago has its own rule and it is far broader than the state's: a landlord who holds a security deposit or prepaid rent for more than six months pays interest at a rate the City Comptroller announces each year — 0.01% for rental agreements entered into during 2026 — with no unit-count threshold (Municipal Code § 5-12-080(c)). Evanston's own deposit-interest rule, which pegged to Chicago's rate rather than the state's, was struck by Ordinance 52-O-24 and stopped operating on January 1, 2025, so a lease that began earlier is still governed by that repealed local rule and its Chicago-pegged rate.

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

Verified August 28, 2026 All Illinois topics →

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

SB 1260 (104th General Assembly, 2025-2026) — Would repeal the Rent Control Preemption Act (50 ILCS 825), ending the statewide bar on local rent regulation and leaving home-rule and non-home-rule units free to consider rent-control ordinances. Repeal bills of this kind have been introduced in most recent sessions without passing. Status: Introduced February 2025; in Senate committee with no floor action. Alive until the 104th General Assembly adjourns in January 2027. (checked August 12, 2026).

Illinois requires deposit interest only from lessors of residential property with 25 or more units, and only on a deposit held more than six months.

Cited to 765 ILCS 715/1 (Security Deposit Interest Act; coverage, the six-month condition and the rate) Sec. 1 and 6 more cited sources · Verified August 28, 2026

Where the Security Deposit Interest Act applies, interest is computed from the date of the deposit at the rate the state's largest commercial bank paid on minimum-deposit passbook savings as of December 31 of the year before the lease began, and that rate stays with the lease. For a lease starting in 2026 the figure is 0.005% a year. Interest of $5 or more must be paid in cash or as a rent credit within 30 days after each 12-month rental period, and every dollar of accumulated interest is due when the tenancy ends, however small. Public housing deposits are outside the Act, and a lessor who willfully refuses to pay owes an amount equal to the whole deposit plus costs and fees. Chicago runs a much broader rule of its own with no unit threshold; Evanston's local rule ended for leases beginning on or after January 1, 2025.

Illinois deposit interest at a glance

Interest owed to the tenant	Conditional — owed only in certain circumstances
How the rate is set	A figure announced on a published cycle
Current figure	0.005% for leases beginning in calendar year 2026 — the rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2025, announced by the Illinois Department of Financial and Professional Regulation
Rate rules	Section 1 pegs the rate to "the interest paid by the largest commercial bank, as measured by total assets, having its main banking premises in this State on minimum deposit passbook savings accounts as of December 31 of the calendar year immediately preceding the inception of the rental agreement." Two consequences follow. The rate is fixed at the lease's inception and does not re-set annually during a multi-year tenancy; a new rental agreement re-pegs it. And the legally operative number is what that bank actually paid — the Department of Financial and Professional Regulation announces it, but the Act itself gives the Department no role, and its January release reports the rate the bank paid rather than setting one. The announcement carries two numbers, and only one of them is the statutory rate. For 2026 the Department reports an interest rate of 0.005% and an annual percentage yield of 0.01%. Section 1 pegs to the interest paid on the accounts, which is the nominal 0.005% figure; the yield is the bank's compounded return. Using the yield doubles every Illinois payout. The Act prescribes no compounding convention, and nothing in its text supports anything beyond simple interest at the stated annual rate.
Accrual and payment	Interest is "computed from the date of the deposit," so once the duty is triggered it runs from day one rather than from the seventh month. Within 30 days after the end of each 12-month rental period the lessor must pay any interest that has accumulated to $5 or more, in cash or as a credit applied to rent due, except when the lessee is in default under the lease. The $5 figure is a payment threshold for that period, not an accrual threshold: anything below it carries forward. At the end of the tenancy everything is settled. Section 2 requires the lessor to "pay all interest that has accumulated and remains unpaid, regardless of the amount, upon termination of the tenancy" — a sentence added by P.A. 99-253, effective January 1, 2016, and the operative rule for short tenancies and for sub-$5 balances.
Who and what is covered	The duty reaches a lessor of residential real property "containing 25 or more units in either a single building or a complex of buildings located on contiguous parcels of real property," and only a deposit the lessor has held "for more than 6 months." Below that unit count, or at or under six months, state law requires no interest at all. Section 3 carries the Act's only scope exemption: it does not apply to a deposit made with respect to public housing. A lessee's default is not a second exemption — it excepts the 30-day payment duty in § 2, while interest continues to accrue under § 1 and the duty to pay everything accumulated at termination is not conditioned on the lessee being current.
Statute controls where or how the deposit is held	No statute addresses how the deposit is held
Interest-bearing account required	No statute addresses whether the account must bear interest
Custody rules	No statute addresses custody of the deposit
Penalty for violation	A lessor "who willfully fails or refuses to pay the interest required by this Act shall, upon a finding by a circuit court that he has willfully failed or refused to pay, be liable for an amount equal to the amount of the security deposit, together with court costs and reasonable attorneys fees" (§ 2). The measure is the whole deposit, not the unpaid interest, so on a rate of thousandths of a percent the exposure dwarfs the sum in dispute — but it takes a court finding of willfulness, and the Act provides nothing for a non-willful failure beyond the interest itself.
Local rules	Chicago has its own rule and it is far broader than the state's: a landlord who holds a security deposit or prepaid rent for more than six months pays interest at a rate the City Comptroller announces each year — 0.01% for rental agreements entered into during 2026 — with no unit-count threshold (Municipal Code § 5-12-080(c)). Evanston's own deposit-interest rule, which pegged to Chicago's rate rather than the state's, was struck by Ordinance 52-O-24 and stopped operating on January 1, 2025, so a lease that began earlier is still governed by that repealed local rule and its Chicago-pegged rate.

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

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Published rate tables

Security Deposit Interest Act rate, announced by the Department of Financial and Professional Regulation

Each January the Department's Division of Banking announces the interest rate that the largest commercial bank with its main banking premises in Illinois paid on minimum-deposit passbook savings as of December 31 of the year just ended. Under § 1 of the Act that figure governs a lease whose inception falls in the announcement year, and it stays with that rental agreement for its whole life rather than moving year to year — so each row here is labelled by the lease year it governs, not by an accrual window. The figure is the nominal interest rate; the same announcement also reports an annual percentage yield, which is the bank's compounded yield and not what the Act pegs to. The Department's series begins with lease year 2017; announcements for earlier lease years are no longer available from the Department, and the flat recent run is no basis for assuming the same rate on an older lease, so no figure is stated for those years.

Period	Rate	Note
leases beginning in calendar year 2017	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2016, announced January 13, 2017. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2018	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2017, announced January 8, 2018. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2019	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2018, announced January 7, 2019. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2020	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2019, announced January 6, 2020. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2021	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2020, announced January 8, 2021. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2022	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2021, announced January 3, 2022. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2023	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2022, announced January 3, 2023. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2024	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2023, announced January 3, 2024. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2025	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2024, announced January 2, 2025. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.
leases beginning in calendar year 2026	0.005%	The rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2025, announced January 6, 2026. The same announcement reports an annual percentage yield of 0.01%, which is not the statutory figure.

A current series — the Illinois Department of Financial and Professional Regulation, Division of Banking, at the turn of each year for leases beginning that year. Source: official source · verified August 28, 2026.

City and county deposit-interest pages in Illinois

Chicago — its own local interest rule
Evanston — a repealed or voided former rule, still widely misquoted

Notes and caveats

The rate is the nominal figure, not the yield — The Department's January release reports two numbers: an interest rate of 0.005% and an annual percentage yield of 0.01%. Section 1 pegs to "the interest paid … on minimum deposit passbook savings accounts," which is the nominal rate. The yield is the bank's compounded return on its own account, and a calculation built on it pays a tenant twice what the Act requires.
More than six months, not six months or more — Section 1 conditions the duty on a deposit "held by the lessor for more than 6 months." The Department's own summary of the Act describes it as a deposit "held for six months or more." At exactly six months the two readings part company, and the statute is the one that governs.
A tenant's default does not switch the Act off — The Department's summary says the Act does not apply to "a lessee who is in default under the terms of the lease." The Act's only scope exemption is public housing, in § 3. Default appears in § 2 as an exception to the 30-day payment duty: interest keeps accruing under § 1, and the duty to pay everything accumulated at termination carries no default condition. Treating default as an exemption overstates the landlord's position.
The rate is locked at the lease's inception — The figure that governs is the one for the calendar year immediately preceding the inception of the rental agreement, and it does not move as the years pass. A tenancy running under one rental agreement from 2019 to 2026 uses the 2019 figure throughout; signing a new rental agreement re-pegs the rate.
Leases that began before 2017 — The Department's announcements available today reach back to lease year 2017. No figure is stated here for an earlier lease year, and the identical run of recent years is no reason to assume the same rate applied before it, so interest on a lease that began before 2017 cannot be worked out from this record alone.
What the Act does not do — The Security Deposit Interest Act has four sections and none of them addresses how the deposit is held — no separate account, no named institution, no commingling rule. Chicago's municipal code does answer those questions for a Chicago tenancy: it requires a federally insured interest-bearing account and forbids commingling.
Who names the bank — Every announcement from 2017 through 2026 identifies the same institution — The Northern Trust Company, Chicago — as the largest commercial bank with its main banking premises in Illinois, and reports the same 0.005% rate. The Department announces what that bank paid; it does not set a rate, and the Act assigns it no role.

Common questions: Illinois 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 Illinois security deposit interest rate right now?: 0.005% for leases beginning in calendar year 2026 — the rate The Northern Trust Company, Chicago paid on minimum-deposit passbook savings as of December 31, 2025, announced by the Illinois Department of Financial and Professional Regulation. Section 1 pegs the rate to "the interest paid by the largest commercial bank, as measured by total assets, having its main banking premises in this State on minimum deposit passbook savings accounts as of December 31 of the calendar year immediately preceding the inception of the rental agreement." Two consequences follow.
When must a landlord pay or credit deposit interest in Illinois?: Interest is "computed from the date of the deposit," so once the duty is triggered it runs from day one rather than from the seventh month. Within 30 days after the end of each 12-month rental period the lessor must pay any interest that has accumulated to $5 or more, in cash or as a credit applied to rent due, except when the lessee is in default under the lease.
Does the deposit have to be in an interest-bearing account in Illinois?: No statute addresses whether the account must bear interest.
What happens if a landlord does not pay deposit interest in Illinois?: A lessor "who willfully fails or refuses to pay the interest required by this Act shall, upon a finding by a circuit court that he has willfully failed or refused to pay, be liable for an amount equal to the amount of the security deposit, together with court costs and reasonable attorneys fees" (§ 2). The measure is the whole deposit, not the unpaid interest, so on a rate of thousandths of a percent the exposure dwarfs the sum in dispute — but it takes a court finding of willfulness, and the Act provides nothing for a non-willful failure beyond the interest itself.
Do any cities or counties in Illinois have their own deposit-interest rules?: Chicago has its own rule and it is far broader than the state's: a landlord who holds a security deposit or prepaid rent for more than six months pays interest at a rate the City Comptroller announces each year — 0.01% for rental agreements entered into during 2026 — with no unit-count threshold (Municipal Code § 5-12-080(c)). Evanston's own deposit-interest rule, which pegged to Chicago's rate rather than the state's, was struck by Ordinance 52-O-24 and stopped operating on January 1, 2025, so a lease that began earlier is still governed by that repealed local rule and its Chicago-pegged rate.

Citations

765 ILCS 715/1 (Security Deposit Interest Act; coverage, the six-month condition and the rate) · Sec. 1 (verified 2026) Official source
765 ILCS 715/2 (payment timing, the $5 threshold, payment at termination, willful-nonpayment liability) · Sec. 2 (verified 2026) Official source
765 ILCS 715/3 (public housing exemption) · Sec. 3 (verified 2026) Official source
Illinois Department of Financial and Professional Regulation, Division of Banking — interest rates affecting the Security Deposit Interest Act (January 6, 2026) (verified 2026) Official source
Chicago Municipal Code § 5-12-080 (security deposits; the local interest duty) · (c) (verified 2026) Official source
City of Chicago Comptroller, rate of interest on rental security deposits (verified 2026) Official source
Evanston Ordinance 52-O-24 § 1 (adopted July 22, 2024, effective January 1, 2025; removed the local deposit-interest rule) (verified 2026) Official source

How this record was verified: Complete read of the Security Deposit Interest Act, 765 ILCS 715, all four of its sections (0.01, 1, 2 and 3) in the General Assembly's published act text, with each element of the duty matched to its statutory sentence; the Illinois Department of Financial and Professional Regulation's rate announcements for lease years 2017 through 2026 read one by one on the Department's own site, including the release dated January 6, 2026; Evanston's codified Title 5, chapter 3 and the city's copy of the enacting Ordinance 52-O-24 read for the repeal of the local interest rule; and Chicago's municipal code § 5-12-080 and the City Comptroller's 2026 rate announcement read for the local rule that still operates.