Security Deposit Interest Rates

Landlords in all areas of Santa Cruz County, with the exception of Scotts Valley, are required to pay tenants interest on their security deposits.

  • Interest is to begin accruing the day the deposit is received by the landlord.
  • All rates quoted below are annual rates, computed on simple interest and are subject to change.
  • How to compute: Dollar amount of your deposit X interest rate ÷ 12 (months) X number of months your landlord held the deposit. Last month’s rent is considered a security deposit. Example: $7000 x .0001 ÷ 12(months) x 9(months) = $.54 (54 cents)

City of Santa Cruz
Ordinance began 1/1/84. Effective 3/2/2013, landlord may pay security deposit interest at the termination of tenancy or at the next February occurring after accrued interest reaches $50, whichever occurs first. Rate for 2017 not determined as of update. The City advises to check their web site for the latest information.

1/1/09 – 12/31/09 .23% 1/1/12 – 12/31/12 .04%
1/1/10 – 12/31/10 .1% 1/1/13 – 12/31/13 .02%
1/1/11 – 12/31/11 .06% 1/1/14 – 12/31/16 .01%

Unincorporated areas of Santa Cruz County
Interest ordinance began 1/1/89. Landlord must pay interest within three weeks of every fifth year, and/or upon vacating

1/1/09 – 12/31/09 .23% 1/1/12 – 12/31/12 .04%
1/1/10 – 12/31/10 .1% 1/1/13 – 12/31/13 .02%
1/1/11 – 12/31/11 .06% 1/1/14 – 12/31/17 .01%

City of Capitola
Interest ordinance began 3/14/98. Capitola requires that payment be made at the end of the next February occurring after accrued interest reaches $50, or upon vacating.

1/1/09 – 12/31/09 .23% 1/1/12 – 12/31/12 0%
1/1/10 – 12/31/10 .1% 1/1/13 – 12/31/13 0%
1/1/11 – 12/31/11 0% 1/1/14 – 12/31/17 0%

City of Watsonville
Interest ordinance began 6/1/91. Landlord must pay interest yearly by January 1st as long as tenancy has continued for at least 6 months, or upon vacating.

1/1/09 – 12/31/09 .23% 1/1/12 – 12/31/12 0%
1/1/10 – 12/31/10 .1% 1/1/13 – 12/31/13 0%
1/1/11 – 12/31/11 0% 1/1/14 – 12/31/17 0%