New York Security Deposit Interest Calculator & Escrow Rules
In New York, interest reflects actual bank yield less a 1% landlord administrative fee.
$0.00
Property has 1 units, which is below New York's statutory threshold of 6 units required under N.Y. Gen. Oblig. Law § 7-103.
New York Deposit Interest Laws at a Glance (N.Y. Gen. Oblig. Law § 7-103)
Payable annually to tenant in cash, applied toward rent, or held in trust until tenancy termination.
| Statutory Interest Mandate | Mandatory under state law |
|---|---|
| Statutory Interest Rate | 2.5% per year (N.Y. Gen. Oblig. Law § 7-103) |
| Minimum Tenancy Duration | 12 months of continuous tenancy |
| Escrow Account & Banking Rule | Buildings with 6 or more units must deposit security funds in an interest-bearing New York banking organization. |
| Governing Statute | N.Y. Gen. Oblig. Law § 7-103 ↗ |
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Key New York Statutory Nuances & Escrow Case Law
- 6-Unit Statutory Threshold: Mandatory interest requirements apply only to rental residential buildings containing 6 or more units.
- 1% Landlord Administrative Allowance: Landlord is legally entitled to withdraw 1% per year of the deposit amount to cover administrative expenses.
- Prohibition on Commingling: Security deposits remain tenant property held in trust; commingling with landlord personal funds forfeits all deduction rights.
Brooklyn 10-Unit Apartment Escrow Calculation
$2,500
12 months
$37.50
On a $2,500 deposit in a 10-unit building with a 2.5% bank yield ($62.50), the landlord retains the 1% administrative fee ($25.00), paying $37.50 net interest to the tenant.
New York Security Deposit Interest FAQs
Does New York law require interest on security deposits?
Under N.Y. Gen. Oblig. Law § 7-103, landlords of buildings with 6 or more residential units must place deposits in an interest-bearing New York bank account.
Are 1-to-5 unit buildings in New York required to pay deposit interest?
No. State statute exempts buildings with fewer than 6 units from interest requirements unless the written lease agreement states otherwise.
How much administrative fee can a New York landlord keep?
Under § 7-103(2), the landlord is entitled to retain 1% per year of the deposited security money as administrative expense compensation.
What are the penalties for commingling security deposits in New York?
A landlord who commingles deposit funds with personal money commits conversion under New York law and forfeits the legal right to retain any portion of the deposit.