Provides that landlords would pay interest on security deposits in residential landlord-tenant matters.

Rhode Island Senate Bill: Interest on Security Deposits

This bill would require landlords in Rhode Island to pay interest on security deposits they collect from residential tenants. When a tenant rents a home or apartment, they typically pay a security deposit upfront — money held by the landlord as protection against unpaid rent or damages. Under this proposal, that money would earn interest while the landlord holds it, and the tenant would be entitled to receive that interest, likely when they move out and the deposit is returned.

The bill affects both tenants and landlords across Rhode Island's residential rental market. Tenants would benefit by receiving a small additional payment on top of their returned deposit after their lease ends. Landlords, on the other hand, would take on a new financial responsibility — tracking interest accumulation and making sure it is paid out appropriately. The specific interest rate that would apply has not been detailed in the available information, but such provisions in other states are typically tied to a standard savings or bank rate.

This type of policy already exists in several other states, where it is intended to ensure that tenants' money continues to work for them even while it is being held by someone else. The bill has been introduced and referred to the Senate Judiciary Committee, meaning it is in the early stages of the legislative process and has not yet been voted on or signed into law.