The Alberta government has announced changes to the interest rates for security deposit payments to tenants, effective Jan. 1, 2025.

Key changes

• Current rate: 1.6% Since Jan. 1, 2024, the interest rate on security deposits has been
• New rate: Starting Jan. 1, 2025, the interest rate will decrease to 1.0%, as outlined in the Residential Tenancies Act and the Mobile Home Sites Tenancies Act (Section 2).

Refresher on tenant interest payment rules

Annual payments:

• Interest on security deposits must be paid to tenants annually unless both parties agree otherwise in writing.
• Alternatively, interest can be compounded annually and paid at the end of the lease agreement.

Higher interest rates:

• Landlords may agree to a higher interest rate in the lease agreement.
• If so, landlords are required to pay both the agreed-upon interest rate and the compounded interest based on that rate.

Action required

• Update all residential lease agreements to reflect the new 1.0% interest rate for security deposits starting in 2025.

The Alberta government offers an online calculator to help landlords determine interest payments.

• Access the calculator here: Service Alberta: Interest Chart.

For more details, visit the Alberta government's official page on this change: Security Deposit Interest Rate Change.