Florida Security Deposit Interest: 5% Rule Explained (F.S. §83.49)

Florida has no statutory cap on the size of a residential security deposit, but it does have a detailed statute regulating how the deposit must be held and whether interest must be paid to the tenant. Most Florida tenants — and many landlords — do not realize the deposit can earn the tenant interest at a statutorily fixed rate of 5% per year simple, or 75% of the depository institution’s annualized rate, depending on the landlord’s election under Florida Statutes §83.49.

This article explains the three holding options, the disclosure obligation, the interest math, and what happens when the landlord gets it wrong.

1. The three holding options under F.S. §83.49(1)

When a Florida landlord receives any portion of a residential security deposit, advance rent, or last month’s rent, the landlord must — within 30 days — comply with one of three holding mechanisms set out in F.S. §83.49(1):

Option (a) — Separate non-interest-bearing account. “Hold the total amount of such money in a separate non-interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord.”

Option (b) — Separate interest-bearing account. “Hold the total amount of such money in a separate interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants, in which case the tenant shall receive and collect interest in an amount of at least 75 percent of the annualized average interest rate payable on such account or interest at the rate of 5 percent per year, simple interest, whichever the landlord elects.”

Option (c) — Surety bond. “Post a surety bond, executed by the landlord as principal and a surety company authorized and licensed to do business in the state as surety, with the clerk of the circuit court in the county in which the dwelling unit is located, in the total amount of the security deposits and advance rent he or she holds on behalf of the tenants or USD 50,000, whichever is less. The bond shall be conditioned upon the faithful compliance of the landlord with the provisions of this section.”

The landlord chooses one of the three. Only Option (b) requires the landlord to pay interest to the tenant. Options (a) and (c) do not.

Primary source — F.S. §83.49: http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0083/Sections/0083.49.html

2. The interest math under Option (b)

If the landlord chooses Option (b) — separate interest-bearing account — the landlord must pay the tenant the higher of:

• 75% of the bank’s annualized rate on that account, OR
• 5% per year, simple interest

In 2026, with most savings account rates well below 6.7%, the 5% simple-interest rule is the binding constraint. A USD 2,000 deposit held for one year under Option (b) generates USD 100 of interest owed to the tenant.

The interest is paid:

• Annually, on the anniversary of the deposit date, OR
• At the end of the tenancy, whichever the landlord elects per §83.49(1)(b)

If the landlord elects annual payment, the interest may be applied to the next month’s rent (a common convenience) or paid in cash to the tenant. The choice is the landlord’s, but the documentation of payment is the landlord’s burden.

3. The 30-day written disclosure under §83.49(2)

Within 30 days of receiving the security deposit and advance rent, the landlord must provide the tenant with written notice specifying:

• The name and address of the depository in which the funds are being held (Options (a) and (b))
• Whether the account is interest-bearing or non-interest-bearing
• If interest-bearing, how often the interest will be paid (annually or at end of tenancy)
• The percentage interest rate (the elected rate — 75% of bank or 5% simple)
• A copy of, or summary of, F.S. §83.49(3) — the deposit-return procedure (the so-called “statutory tenant-rights notice”)

The notice may be hand-delivered or sent by mail. It must be in writing. Verbal disclosure is not sufficient and exposes the landlord to forfeiture of the right to claim against the deposit.

4. The “5+ unit” written-disclosure exemption

Under F.S. §83.49(2)(c), the written disclosure obligation applies to any landlord renting a single dwelling unit, but landlords who rent fewer than 5 individual dwelling units may incorporate the §83.49(3) deposit-return procedure into the lease itself instead of providing a separate written notice. Practically, this means:

• 5+ unit landlord: must give the disclosure separately
• Under 5 unit landlord: may include the §83.49(3) text inside the lease

This is not an exemption from disclosure — it is a permission to deliver the disclosure differently. The content is identical.

5. Deposit return — the post-tenancy timeline

Under F.S. §83.49(3), the landlord must:

The Notice of Intent to Impose Claim must specify the reason for the claim (e.g., “USD 350 for repair of damaged door, USD 200 for unpaid utilities”) and must be sent to the tenant’s last known address by certified mail, return receipt requested.

If the landlord fails to send the notice within 30 days, the landlord forfeits the right to make any claim and must return the entire deposit.

6. Penalties for non-compliance

The most common landlord errors and their consequences:

Florida small-claims courts hear thousands of deposit disputes per year. Tenants who follow the §83.49(3) procedure (objection by certified mail within 15 days) generally prevail when the landlord has not complied with the disclosure or notice requirements.

7. Surety bond in lieu of holding (Option c)

The surety bond option under §83.49(1)(c) is rarely used by individual landlords but is common for large multi-property operators. The bond, posted with the Clerk of the Circuit Court in the property’s county, must be in the total amount of all deposits held or USD 50,000, whichever is less. The landlord must also pay interest to the tenant at 5% per year simple under §83.49(1)(c) — meaning the surety-bond option does require interest payment, contrary to common misunderstanding.

Primary source — Florida Bar Consumer Pamphlet on Tenants’ Rights: https://www.floridabar.org/public/consumer/tip016/

8. What the lease should say

A compliant Scrib🐮-prepared Florida lease will include:

1. ☐ The selected holding mechanism (Option a, b, or c)
2. ☐ If (a) or (b): the depository bank’s name and address
3. ☐ If (b) or (c): the elected interest rate (5% simple or 75% of bank rate)
4. ☐ If (b) or (c): the timing of interest payment (annual or at end)
5. ☐ The §83.49(3) deposit-return procedure (verbatim or by attached copy)
6. ☐ The address designated for service of notices (F.S. §83.50)
7. ☐ Reciprocal attorney-fee provision (mandated by F.S. §83.48)

A lease that omits items 1–5 is non-compliant and exposes the landlord to deposit forfeiture if challenged.

9. Tenant playbook

1. Confirm the §83.49(2) written disclosure arrives within 30 days of paying the deposit. If it doesn’t, send a written demand for it — and keep proof of the demand.
2. If the lease says “interest-bearing,” confirm the rate (5% simple or 75% bank).
3. At move-out, give the landlord written notice of your forwarding address — the §83.49(3) notice must go to your “last known address.”
4. Calendar 30 days from move-out. If no Notice of Intent to Impose Claim arrives, demand the full deposit back.
5. If a Notice arrives, object by certified mail within 15 days if you disagree with any deduction.
6. Small-claims jurisdiction is up to USD 8,000 in most Florida counties — well within the deposit-dispute range.

10. Landlord playbook

1. Decide between Options (a), (b), and (c) before any deposit is collected. Putting the decision off until later means missing the 30-day disclosure deadline.
2. Use the same depository for every property — one account per property regime — to simplify compliance.
3. Issue the disclosure on day 1, not day 29. There is no penalty for early disclosure.
4. Calendar 30 days post-vacate for the Notice of Intent to Impose Claim. Send by certified mail, keep the green card.
5. Document deductions with receipts and photographs — the small-claims court will weigh credibility heavily.

Create your Florida lease with Scrib🐮

¥22,000/month pass for unlimited access to all 18 document types across 7 countries. Start Free Preview →

Disclaimer

Legal information, not legal advice. MmowW Scrib🐮 is operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not US attorneys.

Sources

1. F.S. §83.49 — http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0083/Sections/0083.49.html
2. F.S. Chapter 83 Part II — http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0083/0083ContentsIndex.html
3. F.S. §83.48 — http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0083/Sections/0083.48.html
4. F.S. §83.50 — http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0083/Sections/0083.50.html
5. Florida Online Sunshine portal — http://www.leg.state.fl.us/Statutes/
6. Florida Bar Consumer Pamphlet — Tenants’ Rights — https://www.floridabar.org/public/consumer/tip016/