Alberta Security Deposit Interest: 2026 Rate, Math, and Calculator

Under section 44 of Alberta's Residential Tenancies Act, every landlord in the province must pay annual interest on a tenant's security deposit. Most landlords either forget entirely or pay the wrong rate — and at the end of the tenancy this turns into a small but real liability.

This post gives you the current rate, the math, a copy-paste spreadsheet formula, and the documentation you need to satisfy the Residential Tenancy Dispute Resolution Service (RTDRS) if a former tenant ever disputes the math.

The 2026 Alberta security deposit interest rate

The rate is set by ministerial order and revised every January 1. For most of the past decade the rate has hovered between 0% and 1.5%. Always check Service Alberta's Security Deposit Interest Rate page before generating receipts — link below.

Historical rates (annual, simple, payable on the deposit balance):

• 2024: 1.5%
• 2025: 1.5%
• 2026: confirm at the official Service Alberta page (we update this post every January)

How the math works

Interest is calculated on the security deposit (and any pet damage deposit) for each tenancy year, compounded annually, payable at the end of each tenancy year or at lease end — whichever the tenant prefers.

Formula:

Year-end balance = Previous balance × (1 + annual rate)

Worked example

Tenant deposits $1,000 on Mar 1, 2024. The interest rate is 1.5% for 2024 and 1.5% for 2025.

• Mar 1, 2024 deposit: $1,000.00
• Mar 1, 2025 balance: $1,000 × 1.015 = $1,015.00 (interest earned: $15.00)
• Mar 1, 2026 balance: $1,015 × 1.015 = $1,030.23 (interest earned in year 2: $15.23)

If the tenant moves out Mar 1, 2026 and you owe them the full deposit back, you write a cheque for $1,030.23 — not $1,000.

Copy-paste spreadsheet formula

In any spreadsheet (Excel, Google Sheets, Numbers), put the deposit in cell A1, the rate (as a decimal like 0.015) in B1, and the number of full years in C1:

=A1 * POWER(1 + B1, C1)

Adjust for partial years (move-out mid-year) using:

=A1 * POWER(1 + B1, FullYears) + A1 * B1 * (PartialDays / 365)

When to pay the interest

You have two legal options under the RTA:

1. Pay annually on the anniversary of the deposit. This is the safer practice — interest never gets large enough to surprise anyone.
2. Pay at the end of the tenancy as a lump sum together with the deposit return. Most small landlords choose this option.

You may NOT keep the interest as part of your income. It belongs to the tenant.

What you must give the tenant

At move-out you must provide a written statement showing:

• The original deposit amount
• The rate(s) used for each year
• The interest accrued each year
• The total deposit plus interest payable
• Any deductions you are taking (with receipts and itemization)

If you deduct anything from the deposit, you must do so within 10 days of the tenancy ending. Miss the 10-day window and you may have to refund the full deposit plus interest regardless of damages.

Common landlord mistakes

1. Forgetting to track the rate change. The rate can change every January 1. A 5-year tenancy might span 5 different rates.
2. Compounding wrong. The interest compounds annually, not monthly.
3. Forgetting the pet damage deposit. If a tenant paid a separate pet damage deposit (allowed in Alberta — max half a month's rent), interest applies to it too.
4. Keeping the interest as income. Not allowed. The interest is the tenant's money.
5. No paper trail. If you can't produce the interest calculation at RTDRS, the tribunal will simply award the tenant the maximum reasonable interest plus the deposit.

What happens if you skip it

You can be ordered to pay all back interest plus a penalty. RTDRS arbitrators routinely award tenants the maximum reasonable interest figure when landlords cannot produce the math. Worse — repeat offenders can face administrative penalties from Service Alberta.

Official sources

The legal authority is the Alberta Residential Tenancies Act, section 44, and the Security Deposit Interest Rate Regulation. The current rate is always posted on the Service Alberta consumer information website.

Bottom line

It's two minutes of math per tenant per year — and the alternative is being ordered to pay everything anyway, plus damages. Set a calendar reminder for January 1 of every year to check the new rate, and either update your spreadsheet or let property management software calculate it automatically.