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Landlords can require a security deposit, sometimes referred to as a damage deposit, from their tenants when they move into rental premises. The Residential Tenancies Act and Mobile Home Sites Tenancies Act direct that landlords pay interest on tenant security deposits based on the prescribed rate in the Security Deposit Interest Rate Regulation.
The interest must be paid every year unless the landlord and tenant agree in writing that the interest will be compounded yearly and paid to the tenant at the end of the tenancy. Payment of interest by the landlord to the tenant is not required in years with a minimal annual interest rate of 0%.
Security deposit interest formula
The formula takes the interest rate that ATB Financial is charging for a cashable one-year Guaranteed Investment Certificate (GIC) on November 1 of the previous year and subtracts 3 percentage points. Therefore, if this interest rate is 3% or less on November 1 of a given year, the security deposit interest rate for the following year will be 0%.
Current and past interest rates payable on security deposits
| TIME PERIOD | Minimum Annual Interest Rate |
| January 1, 2026 to December 31, 2026 | 0% |
| January 1, 2025 to December 31, 2025 | 0.5% |
| January 1, 2024 to December 31, 2024 | 1.6% |
| January 1, 2009 to December 31, 2023 | 0% |
| January 1, 2008 to December 31, 2008 | 0.5% |
| January 1, 2007 to December 31, 2007 | 0.3% |
| January 1, 2002 to December 31, 2006 | 0% |
| January 1, 2001 to December 31, 2001 | 1.75% |
| January 1, 2000 to December 31, 2000 | 1.15% |
| January 1, 1999 to December 31, 1999 | 0.75% |
| January 1, 1997 to December 31, 1998 | 0% |
| January 1, 1996 to December 31, 1996 | 2.5% |
| January 1, 1995 to December 31, 1995 | 2.75% |
| July 1, 1994 to December 31, 1994 | 1.5% |
| February 1, 1993 to June 30, 1994 | 3.0% |
| March 1, 1987 to January 31, 1993 | 6.0% |
| January 1, 1984 to February 28, 1987 | 8.0% |