LARSO (Los Angeles) Security Deposit Interest Calculator

If you own rental property in Los Angeles, calculating security deposit interest isn’t optional—it’s required under the Rent Stabilization Ordinance (RSO).

The problem?
Interest rates change every year… and calculating them manually is time-consuming and error-prone.

That’s exactly why we built this tool.

Our Security Deposit Interest Calculator helps landlords quickly determine how much interest is owed—based on real, historical rates from 1990 through today.

Key Takeaways

  • Los Angeles landlords must pay interest on security deposits annually or monthly
  • Interest has been accruing since November 1, 1990
  • Rates change every year, making manual calculations difficult
  • Interest can be paid as:
    • A direct payment, or
    • A credit toward rent
  • Failure to pay can result in tenant claims in court

Use the Security Deposit Interest Calculator

What you’ll need:

  • Security deposit amount
  • Move-in date
  • Move-out date (if applicable)

The tool will automatically:

  • Apply the correct yearly interest rates
  • Calculate total accrued interest
  • Give you a clear breakdown for compliance

Why This Calculator Matters

Most landlords don’t realize that even small interest amounts can add up over time—especially with long-term tenants.

And more importantly…
Incorrect calculations can expose you to liability.

This tool helps you:

  • Stay compliant with Los Angeles RSO rules
  • Avoid disputes with tenants
  • Save time on manual calculations
  • Maintain clean, professional records

When Does Interest on Security Deposits Start?

Interest on security deposits began accruing on November 1, 1990, for tenants who:

  • Had a deposit held for at least 12 months
  • Were legal tenants as of that date

This requirement was established under Los Angeles ordinances, including:

  • Ordinance 166368
  • Ordinance 174017
  • Ordinance 175020

How Security Deposit Interest Must Be Paid

1. During the Tenancy

Landlords must choose one method:

  • Direct payment to the tenant
  • Credit toward rent

You must:

  • Choose one method
  • Notify the tenant in writing

Payments can be made:

  • Monthly, or
  • Annually

2. At Move-Out

Any unpaid interest must be paid:

  • At the same time as the security deposit return
  • In accordance with California Civil Code 1950.5

3. If Property Ownership Changes

If the property is sold or transferred:

  • All accumulated interest must be handled the same as the deposit itself

Los Angeles Security Deposit Interest Rates (1990–2026)

Understanding historical rates is critical for accurate calculations.

Recent Years

YearInterest Rate
20263.03%
20254.32%
20240.52%
20230.04%
20220.03%
20210.06%

Important Notes

  • 2002: 0% interest required (waived by ordinance)
  • Rates fluctuate significantly year-to-year
  • Long-term tenants require multi-year calculations

What Happens If You Don’t Pay Interest?

Tenants may:

  • File a claim in Small Claims Court
  • Seek recovery for unpaid interest

Important:
The city will not enforce this for tenants—this is a civil matter, meaning:

You could face legal action directly from your tenant.

Common Mistakes Landlords Make

  • Forgetting to calculate interest entirely
  • Using a flat rate instead of yearly rates
  • Not documenting payments properly
  • Failing to notify tenants of payment method
  • Missing interest payments at move-out

Who This Tool Is For

This calculator is ideal for:

  • Los Angeles landlords
  • Property managers handling RSO units
  • Owners with long-term tenants
  • Anyone preparing for a tenant move-out

Pro Tip from Patti Widget

“Learn from my mistakes, not yours.
If you’re managing property in Los Angeles, you need systems—not spreadsheets—to stay compliant.”

Frequently Asked Questions

Is this required for all California landlords?

No—this applies specifically to Los Angeles RSO properties.

Can I invest the security deposit?

Yes. Landlords retain discretion over how deposits are held or invested.

Do I have to pay monthly?

No—you can choose monthly or yearly, but you must be consistent and notify the tenant.

Stay Compliant. Stay Protected.

This isn’t just about a small interest payment—it’s about:

  • Reducing liability
  • Protecting your investment
  • Running your rentals like a professional

Need help beyond the calculator?

Join Widget’s Way and get:

  • Weekly live Q&A with Patti Widget
  • Access to landlord tools and templates
  • Real-world strategies for California compliance

Do it Widget’s Way and Stay Out of Trouble!

Have questions? Receive one FREE email consultation!