How to read this result
In the default example, accrued interest is $151.88. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Annual compound mode raises one plus the annual rate to the holding years and multiplies by the deposit. Simple mode multiplies deposit, annual rate and years for interest. The ending balance includes principal.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Security deposit (USD)
- Deposit principal. Minimum: 0.
- Annual interest rate (%/year)
- User-entered applicable rate.
- Holding period (years)
- Time deposit is held. Minimum: 0.
- Interest method (select)
- Simple or annual compound; additional compounding optional.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Security deposit | $3,000.00 |
| Annual interest rate | 2.50% |
| Holding period | 2 |
| Interest method | Annual compound |
| Item | Default scenario |
|---|---|
| Accrued interest | $151.88 |
| Ending balance | $3,151.88 |
Assumptions and limitations
Security-deposit rules and required rates differ by jurisdiction. The calculator must not auto-apply a legal rate without a sourced location-specific module.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
The user supplies the rate and method. This tool does not contain a national required security-deposit interest rate or determine local compliance.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- GovInfo / HUD — 24 CFR §880.608 — Security deposits (federal housing program example)Program-specific example referencing state/local deposit requirements; not a national interest-rate rule.
Frequently asked questions
Why is compound interest higher than simple interest in the default example?
Compounding also earns interest on accumulated interest. At $3,000, 2.5% and two years, compound interest is $151.875, displayed as $151.88; simple interest is $150.
Can I use a jurisdiction-specific rate?
Yes, after verifying the applicable rate and timing rules for your jurisdiction. Enter those assumptions rather than treating the default as a legal requirement.