Ontario Rent Deposit Interest: Check Your Last Month's Rent

Ontario rent deposit interest concerns the money a landlord holds for the last rental period. It is not the same as interest on a bank savings account. First, identify the rent deposit, the amount held and the dates involved. Then check the rate for each relevant year and any record of interest already paid or applied.

Which deposit are you checking?

A last month's rent deposit is meant for the final rental period. Keep it separate from a refundable key deposit and from rent you paid for earlier months. The Ontario standard lease guide explains the rent deposit and yearly interest rules. It also explains that a landlord may use interest to help top up the deposit when rent increases.

Start with the original receipt and lease. Next, note any later payment you made to increase the deposit. If you have only a single bank transfer covering several amounts, ask for a breakdown. A combined transfer can make it hard to tell how much the landlord actually holds as a rent deposit.

Which yearly rate should you use?

The interest rate is tied to Ontario's yearly rent increase guideline. Use the rate for the year involved rather than applying the newest rate to the whole tenancy. Ontario's guideline table lists 2.1% for 2026 and different figures for other years. A tenancy lasting several years can therefore involve more than one rate.

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For a simple full-year illustration, a $2,000 deposit at 2.1% produces $42 in interest: $2,000 multiplied by 0.021. This example uses the 2026 rate and a deposit held unchanged for that full year. It is not a calculation for every tenancy. If the deposit amount or period changed, record those facts before calculating your own figure.

How can interest affect a top-up?

If rent lawfully increases, the landlord may ask to bring the rent deposit up to the new rent amount. Interest can be applied toward that top-up. Therefore, check the account record before assuming the landlord owes a separate cash payment and that you also owe the same amount again as a top-up.

For example, a statement should make clear whether interest was paid to you or credited to the deposit balance. Ask for those entries to be shown separately. A clear ledger lets you follow the opening deposit, the interest, any top-up and the amount available for the final rental period.

What records should you compare?

• The original rent deposit receipt.
• The dates and amounts of any top-ups.
• The lawful rent figures for the right periods.
• Any interest payments or credits.
• The final rental period against which the deposit was used.

Keep a year-by-year list rather than one unexplained total. Next, compare your list with the landlord's statement. If the two differ, identify the exact year or entry in dispute. This is more useful than asking for interest without stating which deposit or period you mean.

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What if the account still does not add up?

Send a concise written request for the missing breakdown and keep a copy. Explain the amount held, the year and the entry you cannot reconcile. Do not change your regular rent payment on your own merely to settle a disputed calculation. Payment and dispute procedures need to be handled through the proper route.

Finally, seek advice from the LTB or a tenant legal service if the issue remains unresolved. Have the lease, receipts and calculation ready. A rent deposit question is not automatically the same as a claim for a damage deposit or a dispute about a rent increase. Keep the issues distinct so you can identify the right next step.

Keep each year's interest and any credit toward the deposit as separate ledger entries.