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Do landlords have to pay interest on security deposits in Massachusetts, and when is it due?
Short answer
Annual deposit interest (5% or bank rate) and statement at end of each tenancy year
Payment timing: Each year on the lease anniversary
At the end of each year of tenancy, send the tenant a statement with bank name/address, deposit amount, account number and interest owed, and pay the interest (5%/yr or the lesser bank rate) or tell the tenant to deduct it from rent.
"pay interest at the rate of five per cent per year, or other such lesser amount of interest as has been received from the bank where the deposit has been held payable to the tenant at the end of each year of the tenancy." malegislature.gov
"At the end of each year of a tenancy, such lessor shall give or send to the tenant from whom a security deposit has been received a statement which shall indicate the name and address of the bank in which the security deposit has been placed," malegislature.gov
Annual deposit interest (5% or bank rate) and statement at end of each tenancy year Verified
Deadline: Each year on the lease anniversary
At the end of each year of tenancy, send the tenant a statement with bank name/address, deposit amount, account number and interest owed, and pay the interest (5%/yr or the lesser bank rate) or tell the tenant to deduct it from rent.
Who it covers: Applies when a deposit is held one year or longer.
"pay interest at the rate of five per cent per year, or other such lesser amount of interest as has been received from the bank where the deposit has been held payable to the tenant at the end of each year of the tenancy." malegislature.gov
"At the end of each year of a tenancy, such lessor shall give or send to the tenant from whom a security deposit has been received a statement which shall indicate the name and address of the bank in which the security deposit has been placed," malegislature.gov
Notes: M.G.L. c.186 §15B(3)(b). If not received within 30 days after the year ends, tenant may deduct the interest from rent. Last month's rent paid in advance has a parallel interest/receipt/annual statement rule (§15B(2)(a)).
Last verified 2026-10-20 · Confidence: high · Status: verified · Report a correction
Interest and annual statement on prepaid last month's rent Verified
Deadline: Each year on the lease anniversary
If you collected last month's rent in advance, give a receipt at the time, and at the end of each tenancy year send a statement and pay the interest (5% or lesser bank rate) or let the tenant deduct it.
Who it covers: Only if last month's rent was collected in advance.
"At the end of each year of tenancy, such lessor shall give or send to the tenant from whom rent in advance was collected a statement which shall indicate the amount payable by such lessor to the tenant." malegislature.gov
Notes: M.G.L. c.186 §15B(2)(a).
Last verified 2026-10-20 · Confidence: high · Status: verified · Report a correction