Landlords must pay 1.83% on residential security deposits for calendar year 2018. Interest is computed monthly. (previously, interest was computed for each 6-month period).
In 2014, the Maryland Legislature changed the law such that, beginning January 1, 2015, the amount of interest landlords are required to pay to residential tenants on security deposits changes each year on January 1. The rate, which changes each year, is the greater of (a) the interest rate for the “U.S. Treasury yield curve rate for 1 year on the first business day of each year”, or (b) 1.5%. Before 2014, interest was computed for each 6-month period that the landlord held the deposit. Beginning January 1, 2015, interest is computer for each month that the landlord holds the deposit. Interest is not compounded.
On January 2, 2018, the US Treasury Yield Curve Rate is 1.83% (see chart above or click on this link ).
We suggest changing the language in your lease agreement and/or security deposit receipt, deleting any reference to paying a specified interest rate and replacing it with “Security Deposit Interest shall be paid at the rate specified by Maryland Law Real Property Article 8, Section 203”.
Here is a history of the rates of interest required by landlords of residential properties to be paid to tenants:
1.5% for every 6 month period a deposit is held from July 1, 1972 to July 1, 1980. (3% annual rate).
2% for every 6 month period a deposit is held from July 1, 1980 to September 30, 2004. (4% annual rate).
1.5% for every 6 month period a deposit is held from October 1, 2004 to December 31, 2014. (3% annual rate).
0.125% for every month a deposit is held from January 1, 2015 to December 31, 2017. (1.5% annual rate).
0.1525% for every month a deposit is held beginning January 1, 2018. (1.83% annual rate).