Rent Deposit Interest Calculator Ontario

When you rent an apartment in Ontario, your landlord may require you to pay a rent deposit. This deposit is typically held in a separate account and is usually paid back to you at the end of your tenancy, minus any deductions for damages or unpaid rent. However, in Ontario, landlords are required to pay interest on your rent deposit if they hold it for more than 30 days.

How Rent Deposit Interest Works in Ontario

The Ontario Residential Tenancies Act (ORTA) requires landlords to pay interest on rent deposits if they hold the money for more than 30 days. The interest rate is typically the same as the Bank of Canada's overnight rate, which is published monthly.

Key Points About Rent Deposit Interest

The interest calculation starts from the 31st day after the deposit is received
The interest is calculated daily on the outstanding balance
Landlords must provide you with a statement showing the interest calculation
If the landlord fails to pay interest, you may be able to claim it from them

Interest Calculation Methods

There are two common methods for calculating interest on rent deposits:

Simple Interest: Calculated only on the original principal amount
Compound Interest: Calculated on the principal plus any previously earned interest

In Ontario, landlords are required to use simple interest for rent deposit calculations. This means the interest is calculated only on the original deposit amount, not on any accumulated interest.

Rent Deposit Interest Calculator

Use this calculator to determine how much interest you'll earn on your Ontario rent deposit. Simply enter the deposit amount, the number of days it was held, and the interest rate, then click "Calculate".

Formula and Assumptions

The interest earned on your rent deposit is calculated using the simple interest formula:

Interest = Principal × Rate × Time
Where:
Principal = Rent deposit amount
Rate = Daily interest rate (annual rate divided by 365)
Time = Number of days held (minus 30 days)

Assumptions:

The interest calculation starts from the 31st day
The interest rate is the Bank of Canada's overnight rate
Simple interest is used for rent deposit calculations in Ontario
No additional fees or deductions are applied

Worked Example

Let's say you paid a $1,500 rent deposit to your landlord in Ontario. The deposit was held for 60 days, and the Bank of Canada's overnight rate was 5% per year.

Daily interest rate = 5% ÷ 365 ≈ 0.0137%
Time = 60 days - 30 days = 30 days
Interest = $1,500 × 0.000137 × 30 ≈ $6.52

In this example, you would earn approximately $6.52 in interest on your $1,500 rent deposit.

Frequently Asked Questions

How is rent deposit interest calculated in Ontario?

In Ontario, rent deposit interest is calculated using simple interest on the original deposit amount. The calculation starts from the 31st day the deposit is held, using the Bank of Canada's overnight rate.

What happens if my landlord doesn't pay rent deposit interest?

If your landlord fails to pay rent deposit interest as required by the Ontario Residential Tenancies Act, you may be able to claim the interest from them. You should keep records of the deposit and any communications with your landlord.

Can I withdraw my rent deposit before the end of the tenancy?

Yes, you can withdraw your rent deposit before the end of the tenancy, but you may be charged for any unpaid rent and damages. The landlord must return your deposit within 30 days of receiving your request.

How do I get my rent deposit back at the end of the tenancy?

At the end of your tenancy, your landlord must return your rent deposit minus any deductions for unpaid rent and damages. They must provide you with a statement showing the calculation of any interest earned.