How Rental Deposit Interest Is Calculated in South Africa
Quick answer: There's no fixed percentage set by law. Section 5(3) of the Rental Housing Act requires the landlord to invest your deposit in an interest-bearing account, and you're owed whatever that account actually earned — typically 6–7% a year on an ordinary savings account in 2026. The interest belongs to you, the tenant, not the landlord.
Most people know a rental deposit is supposed to earn interest. Far fewer know how much, or how that number actually gets worked out — and landlords aren't always much clearer on it either. There's no interest rate written into the Act itself. What's written in is an obligation: put the money somewhere it earns interest, and hand that interest over. This piece covers the part everyone skips — the rate, the calculation method, and what to do if your landlord can't or won't show you either. For the deadlines around when the money is actually due, see our 7 vs 14-day refund guide.
In this article
What "Interest-Bearing Account" Actually Requires
Section 5(3) of the Rental Housing Act 50 of 1999 is specific about one thing and silent on another. It's specific that the landlord must place the deposit in an interest-bearing account at a financial institution for the duration of the tenancy, and that the interest belongs to the tenant. It's silent on which account, which bank, or what rate — that's left to the landlord, within reason.
What this means in practice: the landlord can't keep your deposit in a current account earning nothing, and can't keep it in their own pocket "for safekeeping." It has to be sitting in something that actually accrues interest, and you're entitled to see evidence of that if you ask.
What Rate Applies — and What to Do If You Don't Know It
Because the Act doesn't fix a percentage, the honest answer is: whatever the account your landlord chose actually paid. In 2026, an ordinary savings account at a major SA bank typically pays somewhere around prime minus 3–4%, which works out to roughly 6–7% a year at the SARB prime lending rate of 10.50% (SARB MPC, May 2026). Money market accounts can pay slightly more. That range is a reasonable estimate if you have no other information — it's also the default our calculator uses.
If your landlord has never mentioned an account or a rate, ask for it in writing. A landlord managing the deposit correctly can point you to the account and, at lease end, a statement showing what it earned. If they can't, that's not just an administrative gap — it's a sign the deposit may not have been invested at all, which is a separate problem covered further down.
Not sure what your deposit has earned so far, or what's actually owed at refund?
Calculate My Deposit Refund →Simple Interest vs Compound Interest
The Act doesn't say which method applies either — it just says pay over what the account earned. In the real world, most ordinary savings and money market accounts compound interest, usually monthly. Over a one-year lease the difference between simple and compound interest is small. Over a two- or three-year lease, it starts to matter: compounding means each month's interest itself earns interest, so the total grows slightly faster than a flat simple-interest estimate would suggest.
Calculators, including our own Deposit Refund Calculator, generally use simple interest as the estimate — it's easier to verify against a bank statement and gives a conservative, defensible number. Treat a simple-interest estimate as the floor of what you're owed on a longer lease, not the exact figure; the bank statement is always the final word.
Worked Example
A tenant pays a R15,000 deposit at the start of an 18-month lease. The landlord invests it in a savings account paying 6.5% a year. Using simple interest: R15,000 × 6.5% × (18 ÷ 12) = R1,462.50 in interest over the full tenancy. At lease end, assuming no lawful deductions, the tenant is owed the original R15,000 plus that R1,462.50 — a total of R16,462.50 — within 7 days of the lease ending.
If the same deposit had instead been sitting in a compounding money market account at the same headline rate, the actual figure on the bank statement would likely come out a little higher than R1,462.50, particularly the longer the deposit was held. That gap is exactly why asking for the bank statement, rather than accepting a verbal estimate, is worth doing on any lease longer than a year.
If Your Landlord Never Invested the Deposit
This happens more often than it should, and it doesn't let the landlord off the hook. Failing to invest the deposit is itself a breach of Section 5(3) — a breach covered in more detail in our Rental Housing Act guide — and the landlord remains liable for the interest it should have earned, calculated as if it had been properly invested at a reasonable market rate.
⚠ If your landlord can't show you an interest-bearing account
- Ask in writing for the account details and the rate paid — keep a record of the request
- If there's no response, or the answer is evasive, the deposit was likely never properly invested
- You can raise this with the Rental Housing Tribunal in your province at no cost, even before the lease ends
- The Tribunal can order a reasonable market rate applied retroactively for the full period the deposit was held
Work out the interest and refund due on your own deposit and lease dates.
Use the Deposit Refund Calculator →Frequently Asked Questions
The landlord invests the deposit in an interest-bearing account at a bank, and interest accrues at whatever rate that specific account pays — there is no fixed statutory rate. Most landlords use an ordinary savings or money market account, which in 2026 typically pays somewhere in the 6–7% per year range. Interest is calculated on the deposit amount for the number of days it was held, and the full amount earned belongs to the tenant, added to the deposit at refund.
The Rental Housing Act does not set a fixed percentage. It requires the landlord to actually invest the deposit in an interest-bearing account and pay the tenant whatever that account earned — no more, no less. If a landlord can't produce a bank statement showing the rate paid, the Rental Housing Tribunal can order a reasonable market rate to be used instead, typically the prevailing ordinary savings account rate at a major bank.
The Act itself doesn't specify simple or compound interest — it simply requires the tenant to receive whatever the account actually earned. In practice, most ordinary savings accounts compound interest monthly or annually, so a landlord using a real bank account for a multi-year lease is usually paying compound interest without calling it that. Calculators (including ours) often use simple interest as a conservative, easy-to-verify estimate — treat it as a floor, not a ceiling, on what you may actually be owed.
The landlord is still liable for the interest the deposit should have earned, even if they kept it in a non-interest-bearing account or their own pocket. This is a breach of Section 5(3) of the Rental Housing Act. The tenant can approach the Rental Housing Tribunal, which can order the landlord to pay a reasonable market rate of interest for the period the deposit was held, calculated as if it had been properly invested.
Yes, and it's good practice to ask for it in writing when you pay the deposit, not just at lease end. A landlord acting correctly can show you the account the deposit is held in and, at the end of the lease, a statement showing the interest earned. If a landlord refuses to provide this or becomes evasive, that's a warning sign worth raising with the Rental Housing Tribunal before the lease even ends.