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

No statute addresses whether the account must bear interest.

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

Ohio's deposit remedy is division (C), and it is triggered by one thing: a landlord's failure to comply with division (B). Division (B) governs the end of the tenancy — applying the deposit to past-due rent and to damages from the tenant's noncompliance, and delivering an itemized written notice of any deduction together with the amount due, within 30 days after the rental agreement ends and possession is delivered.

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

Verified August 28, 2026 All Ohio topics →

Ohio requires 5% a year in interest on a security deposit, but only on the part of the deposit above the greater of $50 or one month's rent, so for the ordinary deposit of exactly one month's rent the answer is nothing.

Cited to Ohio Rev. Code § 5321.16 (interest on the excess; six months' possession; annual payment) (A) and 4 more cited sources · Verified August 28, 2026

Interest also runs only where the tenant remains in possession for six months or more. Ohio Rev. Code § 5321.16(A) provides that a deposit "in excess of fifty dollars or one month's periodic rent, whichever is greater, shall bear interest on the excess at the rate of five per cent per annum if the tenant remains in possession of the premises for six months or more, and shall be computed and paid annually by the landlord to the tenant." Because any rent above $50 a month makes one month's rent the floor, a one-month deposit leaves no excess to bear interest. An Ohio appeals court said the same thing about a $600 deposit against $600 monthly rent: it "simply was not in excess of the monthly rent," so the landlord "was not subject to the interest requirement" (Bonesteel v. Nash, 2016-Ohio-3114). Where a deposit does exceed one month's rent, the interest on that excess must be computed and paid every year, and it is owed even if the landlord returns the whole deposit at the end.

Ohio deposit interest at a glance

Interest owed to the tenant	Conditional — owed only in certain circumstances
How the rate is set	A percentage written in the statute
Current figure	5% per year, simple, written into Ohio Rev. Code § 5321.16(A) and unchanged since the section took effect in 1974 — charged only on the part of the deposit above the greater of $50 or one month's periodic rent.
Rate rules	The rate is in the statute and has never moved: "five per cent per annum." What decides the answer is the base it applies to. Interest runs "on the excess" of the deposit over the greater of $50 or one month's periodic rent. For any rent above $50 a month — that is, for essentially every tenancy — the exempt floor is one month's rent, so the arithmetic is 5% a year of the deposit minus one month's rent. Only where the monthly rent is below $50 does the $50 figure become the floor instead. One misreading has been rejected in court: a trial court held that interest was owed only if the deposit exceeded the monthly rent by $50, and the Fifth District reversed, calling that "a prerequisite for interest recovery not written in the statute" (Bonesteel v. Nash, 2016-Ohio-3114, ¶ 26). The two figures are alternatives, and the larger of them is the floor.
Accrual and payment	Two conditions and one deadline. Interest accrues only "if the tenant remains in possession of the premises for six months or more," and only on the part of the deposit above the greater of $50 or one month's periodic rent. It "shall be computed and paid annually by the landlord to the tenant" — a payment made during the tenancy, not a lump sum settled at move-out. And it is owed whether or not the landlord ends up keeping any of the deposit: "the plain language of R.C. 5321.16(A) mandates the payment of interest on a security deposit even if the entire deposit is returned at the end of the tenancy" (Psarras v. Rayburn, 2019-Ohio-2168, ¶ 44).
Who and what is covered	The duty reaches only the part of a deposit above the greater of $50 or one month's periodic rent, and only where the tenant stays in possession for six months or more. A deposit equal to one month's rent has no excess and earns nothing. Labels do not control what counts. Where a landlord collected first month's rent, last month's rent and a deposit adding up to more than one month's rent, the Eighth District held interest was owed on the excess: "[r]egardless of the labels, the appellant withheld double the amount of one month's rent," and the fact that a lease "characterized the deposit as something other than a security deposit is not sufficient to avoid the imposition of interest" (Hart v. Pervan, 2002-Ohio-6219, ¶¶ 12-14).
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	Ohio's deposit remedy is division (C), and it is triggered by one thing: a landlord's failure to comply with division (B). Division (B) governs the end of the tenancy — applying the deposit to past-due rent and to damages from the tenant's noncompliance, and delivering an itemized written notice of any deduction together with the amount due, within 30 days after the rental agreement ends and possession is delivered. Where (B) is broken, the tenant recovers "the property and money due him, together with damages in an amount equal to the amount wrongfully withheld, and reasonable attorneys fees": the withheld sum twice over, with fees on top, and the Ohio Supreme Court has treated that liability as mandatory (Smith v. Padgett, 32 Ohio St.3d 344 (1987)). Division (C) makes no reference to division (A), and the section does not say whether interest that accrued and went unpaid forms part of the "amount due" division (B) requires the landlord to deliver. One trap is express, though: a tenant who does not give the landlord a forwarding or new address in writing "shall not be entitled to damages or attorneys fees under division (C)." The money itself is still owed; the doubling and the fees are lost. (The section prints "attorneys fees" without an apostrophe; quoted as published.)
Local rules	None noted for this state

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

Calculate Ohio security deposit interest — free, no signup, built on the same verified Ohio law as this page.

Notes and caveats

"Ohio requires 5% interest on security deposits" is wrong as stated — The 5% figure is real but the base is not the deposit. Interest runs on the excess over the greater of $50 or one month's periodic rent, so a landlord holding a one-month deposit owes $0.00 no matter how long the tenancy runs. The short version circulated by many sources drops the words "on the excess" and turns a narrow rule into a universal one.
The deposit does not have to beat the rent by $50 — A second misreading treats the two figures as cumulative — as though interest began only once the deposit exceeded one month's rent by $50. A trial court read it that way and was reversed: the statute sets the floor at whichever of $50 or one month's rent is greater, and adding the two "added a prerequisite for interest recovery not written in the statute" (Bonesteel v. Nash, 2016-Ohio-3114, ¶ 26).
Calling it last month's rent does not defeat the interest — Where a landlord took first month's rent, last month's rent and a deposit at signing, and the total held exceeded one month's rent, the Eighth District held interest was owed on the excess and awarded it — $43.75 over a tenancy of about 21 months. Letting a landlord relabel money held above one month's rent as something other than a security deposit "would frustrate the intent of R.C. 5321.16(A)" (Hart v. Pervan, 2002-Ohio-6219).
Owed even when the whole deposit comes back — Interest under division (A) is not a leftover of the move-out accounting. Where a deposit exceeds one month's rent and the tenant has been in possession six months or more, the annual interest is owed even if the landlord makes no deductions at all and returns the deposit in full (Psarras v. Rayburn, 2019-Ohio-2168, ¶ 44).
Whether the doubling remedy reaches unpaid interest is unsettled — Division (C) lets a tenant recover the money due plus damages equal to the amount wrongfully withheld plus attorney fees, and it is triggered solely by a landlord's failure to comply with division (B) — the end-of-tenancy itemization and payment. Division (A), the interest duty, is not mentioned in division (C). Whether interest that accrued and was never paid counts as part of the "amount due" a landlord must deliver under division (B), and so falls inside the doubled sum, is a question the section's words do not answer.
The section says nothing about where the money is kept — Section 5321.16 sets an interest duty, an end-of-tenancy accounting duty, and a tenant's remedy. It imposes no escrow, trust, or separate-account requirement, and says nothing about whether the account the deposit sits in earns anything. Ohio's interest duty runs against the landlord personally, not against an account.
One version since 1974 — The Legislative Service Commission's page for § 5321.16 shows a single version of the section, effective November 4, 1974, from Senate Bill 103 of the 110th General Assembly. The 5% figure and the $50-or-one-month floor are the original 1974 numbers and have never been adjusted.

Common questions: Ohio 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 Ohio security deposit interest rate right now?: 5% per year, simple, written into Ohio Rev. Code § 5321.16(A) and unchanged since the section took effect in 1974 — charged only on the part of the deposit above the greater of $50 or one month's periodic rent. The rate is in the statute and has never moved: "five per cent per annum." What decides the answer is the base it applies to.
When must a landlord pay or credit deposit interest in Ohio?: Two conditions and one deadline. Interest accrues only "if the tenant remains in possession of the premises for six months or more," and only on the part of the deposit above the greater of $50 or one month's periodic rent.
Does the deposit have to be in an interest-bearing account in Ohio?: No statute addresses whether the account must bear interest.
What happens if a landlord does not pay deposit interest in Ohio?: Ohio's deposit remedy is division (C), and it is triggered by one thing: a landlord's failure to comply with division (B). Division (B) governs the end of the tenancy — applying the deposit to past-due rent and to damages from the tenant's noncompliance, and delivering an itemized written notice of any deduction together with the amount due, within 30 days after the rental agreement ends and possession is delivered.
Do any cities or counties in Ohio have their own deposit-interest rules?: None noted for this state.

Citations

Ohio Rev. Code § 5321.16 (interest on the excess; six months' possession; annual payment) · (A) (verified 2026) Official source
Ohio Rev. Code § 5321.16 (end-of-tenancy itemization and the tenant's remedy) · (B), (C) (verified 2026) Official source
Bonesteel v. Nash, 2016-Ohio-3114 (Ohio Ct. App., 5th Dist.) · ¶¶ 23, 26 (verified 2026) Official source
Psarras v. Rayburn, 2019-Ohio-2168 (Ohio Ct. App., 11th Dist.) · ¶ 44 (verified 2026) Official source
Hart v. Pervan, 2002-Ohio-6219 (Ohio Ct. App., 8th Dist.) · ¶¶ 12-14 (verified 2026) Official source

How this record was verified: Direct read of Ohio Rev. Code § 5321.16 (procedures for security deposits) in the Revised Code as published by the Legislative Service Commission, all three divisions read in full, together with the same page's statement that the section has one version, effective November 4, 1974; and direct reads of the Ohio Supreme Court Reporter of Decisions opinions in Bonesteel v. Nash (2016-Ohio-3114), Psarras v. Rayburn (2019-Ohio-2168) and Hart v. Pervan (2002-Ohio-6219) for the excess-only calculation, the duty to pay interest where the whole deposit is returned, and the treatment of money collected under other labels.