Overview
Landlords can require a security deposit, sometimes referred to as a damage deposit, from their tenants when they move into rental premises. Since January 1, 2009, the interest rate on security deposits has been 0%. For 2024, the interest rate is 1.6%.
As prescribed in section 2 of the Security Deposit Interest Rate Regulation under the Residential Tenancies Act and Mobile Home Sites Tenancies Act, this change will be effective January 1, 2024.
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% points.
Additional information about returning security deposits is available at Ending a tenancy.
Interest on security deposits
Interest on the security deposit must be paid to the tenant annually, unless the landlord and tenant agree in writing that it will not be paid annually, in which case the interest must be compounded annually.
A landlord may agree in a residential tenancy agreement to pay a higher interest rate. The landlord is then bound to pay the tenant interest on the security deposit and the compounding interest at the higher rate.
Interest Rate Calculator
The Alberta government provides an online interest rate calculator to assist landlords and tenants in determining how much interest the landlord must pay on the security deposit.
Interest calculation examples
Resources
- RTA handbook for landlords and tenants : Residential Tenancies Act and regulations
- Information for Landlords
- Information for Tenants: English
- Information for Tenants: French
- Information for Tenants: Ukrainian
Contact
Service Alberta and Red Tape Reduction Contact Centre
Edmonton: 780-427-4088
Toll free: 1-877-427-4088 (in Alberta)
Email: [email protected]