Who sets the interest rate for security deposits and when must the interest be paid?

By an Order in Council passed on September 8, 2004, the Security Deposit Interest Rate Regulation includes a permanent formula setting the yearly interest rate payable on security deposits. The annual rate is 3% below the rate of interest that is in effect on November 1 of the previous year for cashable one-year guaranteed investment certificates held or offered by Alberta Treasury Branches Financial (ATB Financial).

A security interest calculator is available on the Alberta Government Services website.

The interest must be paid to a tenant at the end of each tenancy year, unless a landlord and tenant come to an agreement that the interest will be paid to the tenant at the end of the tenancy. The agreement must be in writing. Interest must still be compounded annually when paid at the end of the tenancy.

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