security deposit interest nj law, found in N.J.S.A. 46:8-19, says the interest your deposit earns belongs to you, not your landlord. The key security deposit interest nj deadline is 30 days to tell you, in writing, where your money is held.
What Security Deposit Interest NJ Actually Says
The law starts with one big idea. Your deposit stays your property. The landlord holds it “in trust” for you. They cannot mix it with their own money or treat it as their asset. The interest it earns is yours too.
Where the money goes depends on building size. A landlord with deposits for 10 or more units must use an insured money market fund based in New Jersey. Or they can use a New Jersey bank account with a variable rate, set at least quarterly. However, a landlord with fewer than 10 units only needs an insured New Jersey bank account. That account pays the bank’s current rate on time or savings deposits.
Notice what the statute does not do. It does not set a fixed interest rate. You get what the account actually earns. As a result, your security deposit interest nj payment may be small in some years. Still, it belongs to you. The bulletin also says landlords can no longer take administrative fees out of it. You can read the full text in the official Security Deposit Law (N.J.S.A. 46:8-19 through 26).
| Provision | Exact rule | Section |
|---|---|---|
| Who owns the deposit | You do. Held in trust; not mixed with landlord’s money | N.J.S.A. 46:8-19 |
| Where it is held (10+ units) | Insured NJ money market fund, or NJ bank account with a variable rate set at least quarterly | N.J.S.A. 46:8-19(a) |
| Where it is held (under 10 units) | Insured NJ bank account paying the current time or savings rate | N.J.S.A. 46:8-19(b) |
| Written notice to you | Within 30 days of getting the deposit; within 30 days of moving it; at each annual interest payment | N.J.S.A. 46:8-19(c) |
| Interest payment | Every year, in cash or as rent credit at renewal or anniversary, or January 31 if you were told in writing | N.J.S.A. 46:8-19(c) |
| Your remedy if broken | Deposit plus 7% per year applied to rent, after written notice | N.J.S.A. 46:8-19(c) |
| Deposit cap | 1.5 times one month’s rent; yearly increases capped at 10% of the current deposit | N.J.S.A. 46:8-21.2 |
| Return at move-out | Within 30 days, with interest and an itemized list | N.J.S.A. 46:8-21.1 |
Who Security Deposit Interest NJ Covers (and Who It Does Not)
In most cases, security deposit interest nj protections apply to you. The law covers all rental units used as homes. There is one main exception. It is an owner-occupied building with two or fewer rental units. For example, you rent the top floor of a two-family home where the owner lives downstairs.
However, even that tenant can opt in. You just give the landlord 30 days written notice that you want the law’s protection. You can do this at any time during your tenancy. After that, the full security deposit interest nj rules apply. Also, any lease clause where you “waive” these rights is void under N.J.S.A. 46:8-24.
Seasonal rentals are treated differently. A seasonal rental is 125 consecutive days or less, rented by someone with a permanent home elsewhere. For these, the bank and investment rules do not apply. The landlord must prove the rental is seasonal. Housing for seasonal or migrant farm workers does not count as seasonal. Some towns may have extra local rules, so check with your municipal office.
What Your Landlord Must Do Under This Law
Your landlord’s first job is the written notice. It must name the bank or fund and its address. It must list the account type, the current interest rate, and the amount deposited. This notice can be part of your lease. Typically, you should see it right after you pay. If you have not, security deposit interest nj rules put the burden on your landlord, not you.
If the building is sold, your deposit follows you. The old owner must hand it over within 5 days of delivering the deed. They must tell you by registered or certified mail. Either way, the new owner is responsible for your deposit and your security deposit interest nj payments. That is true even if the old owner never passed the money along.
Special timelines apply in emergencies. If a fire, flood, condemnation, or evacuation displaces you, the deposit is due within 5 business days of your request. If you end a lease under the domestic violence law, N.J.S.A. 46:8-9.6, it is due within 15 business days.
What You Can Do When It Is Broken
If your landlord never gave notice or never banked the money properly, you have a strong tool. You can tell them in writing to apply your deposit, plus 7% per year, toward your rent. After that, they cannot demand another deposit while you live there. For example, this is the remedy many tenants use when they never received a bank notice.
However, there is a catch for missed yearly steps. If the landlord only skipped the annual interest payment or annual notice, you must first send written notice. Then you must give them 30 days to fix it. This waiting period does not apply if they never properly deposited your money at the start. The NJ DCA Security Deposit Bulletin includes a sample letter. Send it certified or registered mail, return receipt requested.
Using your deposit as rent can carry risk if your landlord disputes it. As a result, keep copies of everything. Talk to Legal Services of New Jersey or a tenant attorney first if you can. If you already face an eviction notice, contact legal aid right away.
At move-out, if your landlord does not return the deposit within 30 days, you can sue. If you win, the court must award double the amount owed, plus court costs. It may also award attorney’s fees. Security deposit interest nj claims up to $5,000 go to Small Claims (N.J.S.A. 46:8-21.4). Larger claims go to the Special Civil Part. Confirm the current dollar limits with your county court.
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A landlord who knowingly diverts your deposit can face a fine of at least $200, up to 30 days in jail, or both (N.J.S.A. 46:8-25).
Frequently Asked Questions
How much interest should I get on my deposit in New Jersey?
The statute does not set a fixed percent. Your security deposit interest nj payment equals what the actual account earns. Check your annual notice for the bank and the current rate.
My landlord never told me which bank holds my deposit. What now?
That notice was due within 30 days of your payment. You may be able to send written notice applying your deposit plus 7% per year to rent. Consider talking with a local legal-aid office before you withhold anything.
Can my landlord keep the interest as a fee?
No. Under security deposit interest nj law, the interest belongs to you. The state bulletin says landlords can no longer take administrative fees from deposit money.
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Find Your State’s Exact Rules
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Sources & How to Verify
The rules on this page are drawn from official government and legal-aid sources. Tenant law changes, so always confirm the exact rule with your state’s statute or a local legal-aid office.
- HUD: hud.gov — federal renter protections and fair housing
- Legal Services Corporation: lsc.gov — find free legal aid in your state
- Cornell Legal Information Institute: law.cornell.edu/wex — plain-English legal definitions
- Your state statute & court self-help portal: search “[your state] landlord tenant act” and “[your state] court self-help eviction” for the exact law and forms
Content last reviewed September 2026. If you notice outdated information, please contact us.
New Jersey Renter Guides
- New Jersey Eviction Process
- New Jersey Tenant Rights
- New Jersey Security Deposit Law
- New Jersey Rent Increase Laws
- New Jersey Repairs and Habitability
- Breaking a Lease in New Jersey
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Informational only — not legal advice. Tenant Rights Info is an independent educational resource, not a law firm, and this page does not provide legal advice. Landlord-tenant law varies by state and city and changes over time, so always verify the exact rule with your state’s statute, your local court’s self-help portal, or a legal-aid office. For urgent situations like an active eviction, contact a local legal-aid office or a licensed tenant attorney in your state right away.