Does a landlord have to pay interest on a security deposit in Texas?
Texas requires no interest on a residential security deposit — nothing in the Property Code's security-deposit subchapter mentions interest at all.
Cited to Tex. Prop. Code ch. 92, subch. C (Security Deposits, §§ 92.101 through 92.113) §§ 92.101-92.113 and 3 more cited sources · Verified August 28, 2026
Subchapter C of chapter 92 runs from § 92.101 to § 92.113 and applies, by its own terms, to all residential leases, with no small-landlord exemption. It defines the deposit, requires a refund on or before the thirtieth day after the tenant surrenders the premises, sets the conditions for retention and the accounting that has to accompany it, provides for a landlord's liability for withholding wrongfully, and — since September 1, 2025 — governs fees charged in lieu of a deposit and notice given by e-mail. The whole of the landlord's holding-side duty is a single sentence in § 92.106: 'The landlord shall keep accurate records of all security deposits.' That is a records duty, not a funds duty; it says nothing about where the money sits, in whose name, or what it earns. The closest Texas comes to a trust concept is § 92.103(c), under which 'the tenant's claim to the security deposit takes priority over the claim of any creditor of the landlord, including a trustee in bankruptcy' — a rule about insolvency rather than custody, and the clause most often misread into a Texas escrow requirement that does not exist.
Texas 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 | 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 | No statutory penalty reaches an interest violation specifically |
| Local rules | None noted for this state |
Cite this page: "Landlord Atlas, Texas Security Deposit Interest Laws (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/texas/" — 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 Texas answer — and every state and city that differs — in the deposit interest calculator — free, no signup, built on the same verified Texas law as this page.
Notes and caveats
- The only holding duty Texas imposes is a recordkeeping duty — Section 92.106 is one sentence long and is the entire text: 'The landlord shall keep accurate records of all security deposits.' It has stood unchanged since the subchapter took effect on January 1, 1984. Nothing requires an escrow, a trust account, a separate account, or a named financial institution, and none of those phrases appears anywhere in the subchapter.
- Creditor priority is not a trust account — Section 92.103(c) protects a tenant if the landlord goes under, putting the tenant's claim ahead of other creditors including a bankruptcy trustee. It creates no obligation while the tenancy is running and does not require the money to be held apart. Sources that report a Texas trust-account rule appear to be reading this clause as if it were one.
- The subchapter grew in 2025 and gained no interest rule — Sections 92.112 (agents for delivery of notice) and 92.113 (notice by e-mail) were added by the 89th Legislature's House Bill 2037, chapter 732 of the 2025 regular session laws, effective September 1, 2025. Subchapter C now runs to § 92.113 rather than stopping in the low 92.10x range, as older summaries have it, and the additions carry no interest or account provision.
- Every 'interest' in the subchapter means ownership — The word appears only in § 92.105, on the cessation of the owner's interest: 'if the owner's interest in the premises is terminated by sale, assignment, death,' and 'the person who no longer owns an interest in the rental premises is liable for a security deposit received while the person was the owner.' There is no accrual, rate, timing, or payment provision anywhere.
Common questions: Texas 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 Texas security deposit interest rate right now?
- No published figure exists.
- When must a landlord pay or credit deposit interest in Texas?
- No payment duty exists.
- Does the deposit have to be in an interest-bearing account in Texas?
- No statute addresses whether the account must bear interest.
- What happens if a landlord does not pay deposit interest in Texas?
- No statutory penalty reaches an interest violation specifically.
- Do any cities or counties in Texas have their own deposit-interest rules?
- None noted for this state.
Citations
- Tex. Prop. Code ch. 92, subch. C (Security Deposits, §§ 92.101 through 92.113) · §§ 92.101-92.113 (verified 2026) Official source
- Tex. Prop. Code § 92.106 (records; the whole of the landlord's holding-side duty) (verified 2026) Official source
- Tex. Prop. Code § 92.103 (obligation to refund; creditor priority) · (a), (c) (verified 2026) Official source
- Tex. Prop. Code § 92.105 (cessation of owner's interest) · (a), (b-1) (verified 2026) Official source
How this record was verified: Direct read of Texas Property Code chapter 92, subchapter C (Security Deposits), in the Texas Legislative Council's published statute text — all fifteen sections, §§ 92.101 through 92.113, read in full, including §§ 92.112 and 92.113 as added in 2025. Every occurrence of interest, account, escrow, trust, bank, commingling, separation and financial-institution terms in the subchapter examined in context, and the rest of chapter 92 searched for the same terms as a control. Currency taken from the sections' own enactment credits, which carry Acts 2025, 89th Legislature, Regular Session, ch. 732 (House Bill 2037), § 2, effective September 1, 2025.