Does a landlord pay interest on security deposits in Cook County?

Yes. In Cook County, Illinois, a landlord’s obligation to pay interest on a residential tenant’s security deposit depends on the size and location of the property.

1. Under Illinois State Law (765 ILCS 715/1 et seq.)

Under the Illinois Security Deposit Interest Act, landlords who own 25 or more units in a single building or in a complex of buildings located on contiguous parcels must pay interest on security deposits held for more than six months. The interest rate is determined annually by the Illinois Department of Financial and Professional Regulation (IDFPR) based on the interest paid by the largest commercial bank in Illinois on minimum deposit savings accounts as of the previous December 31.[2][3]

Landlords must pay this interest (either in cash or as a rent credit) within 30 days after the end of each 12-month rental period, or all accrued interest upon termination of tenancy. Failure to pay interest willfully can result in liability for an amount equal to the security deposit, plus court costs and reasonable attorney’s fees (765 ILCS 715/2).[2]

2. Chicago Residential Landlord and Tenant Ordinance (RLTO)

If the rental unit is located within the City of Chicago, the Chicago RLTO (Municipal Code § 5-12-080) imposes stricter requirements. All landlords, regardless of the number of units, must:

• Hold security deposits in a federally insured, interest-bearing account in a financial institution located in Illinois;
• Treat the deposit and accrued interest as the tenant’s property;
• Pay or credit the annual interest due to the tenant within 30 days after the end of each 12-month rental period.

If a Chicago landlord fails to pay the required interest or miscalculates it, the tenant may recover two times the amount of the security deposit plus the unpaid interest as damages, along with the right to additional remedies (§ 5-12-080(B)).[4]

3. Summary for Cook County Tenants

• In Chicago: Landlords must always pay interest on security deposits, regardless of building size or number of units.
• In Suburban Cook County: The Illinois Security Deposit Interest Act applies only if the building or complex has 25 or more units and the deposit is held longer than 6 months.

For 2025, the applicable statewide interest rate under the Security Deposit Interest Act is 0.005% (APY 0.01%), as set by IDFPR.[3]

Conclusion: A Cook County landlord must pay interest on a security deposit only if (1) the rental property is in Chicago (always required), or (2) it is outside Chicago and the landlord owns 25 or more units and holds the deposit over six months.