Interest computation on return of partial deposit : ezLandlordForms

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Interest computation on return of partial deposit

Kathy H

started a topic over 6 years ago

In MN, law requires 1% simple interest for tenant's deposit. Our tenant's deposit was $1500 but we withheld $300 for damages. Is the interest due the tenant based on the initial $1500 ($30) or the actual returned deposit $1200 ($24)? Thank you for your help.

1 Comment

Scott H

said over 6 years ago

They get the full interest. It is their money you are holding on to and all of it is collecting interest the whole time. Its not until they move-out and you deduct for the damages does the money become yours. So $1500 at 1% earns around 150 the first year and 151.50 the second.(compound interest). So the total in the account would 1531.50. You subtract the $300 for damages and they get 1231.50 back.