The cap and what counts toward it
New Jersey's Department of Community Affairs guide Truth in Renting explains that a deposit may not exceed one and one-half times one month's rent (N.J.S.A. 46:8-21.2), and any yearly increase may not exceed 10% of the current deposit. Prepaid rent held as security, including "last month's rent," counts toward the limit, so at lease signing a landlord may not collect more than the first month's rent plus 1.5 months of security. The guide also notes the law does not cover owner-occupied two- or three-family homes unless the tenant opts in by written request.
Trust, a New Jersey institution, and yearly interest
Under N.J.S.A. 46:8-19, the deposit remains your property, is held in trust and may not be mixed with the landlord's money. It must be deposited in an interest-bearing account at an insured bank, savings bank or savings and loan association in New Jersey, or (for larger landlords) an approved money market fund. The landlord must notify you in writing of the institution's name and address, the type of account, the current rate and the amount: within 30 days of receiving the deposit, at each annual interest payment and after any transfer. The interest belongs to you and is paid in cash or credited to rent each year.
Return within 30 days, by personal delivery or certified mail
N.J.S.A. 46:8-21.1 requires the landlord to return the deposit plus your share of interest, less lawful charges, within 30 days after the lease ends, by personal delivery, registered or certified mail. The interest and deductions must be itemized. No deductions may be taken from the deposit of a tenant who stays in possession. If you are displaced by fire, flood, condemnation or evacuation and the premises are posted, the money must be available within five business days.
Double damages
When a tenant sues for money due under § 46:8-21.1 and wins, the court shall award double the amount, with full costs and, at the court's discretion, reasonable attorney's fees. The calculator models the 2× award.
Steps to recover a New Jersey deposit
- Keep the bank notice and the yearly interest statements.
- Leave a forwarding address and document the move-out date.
- After 30 days, send a demand citing N.J.S.A. 46:8-21.1.
- If that fails, file a claim in small claims court.
Neighboring states
New York caps deposits at one month. Pennsylvania pays interest only after the second lease anniversary.
Frequently asked questions
How much can a New Jersey landlord charge for a security deposit?
Up to one and one-half times the monthly rent; prepaid rent held as security counts toward that limit (N.J.S.A. 46:8-21.2, as explained by NJ DCA).
Do New Jersey landlords have to pay interest on deposits?
Yes. The deposit must be in an interest-bearing account in New Jersey and the tenant's interest is paid yearly in cash or as a rent credit (46:8-19).
How long does a New Jersey landlord have to return a deposit?
30 days after the lease ends, by personal delivery, registered or certified mail, with an itemized list of deductions (46:8-21.1).
What can I recover if my New Jersey landlord does not return my deposit?
Double the amount owed, plus full costs and, at the court's discretion, attorney's fees (46:8-21.1).
Sources
- N.J.S.A. 46:8-19 — deposit, interest and notices (NJ Legislature)
- N.J.S.A. 46:8-21.1 — return of deposit and double damages (NJ Legislature)
- NJ Department of Community Affairs — Truth in Renting (PDF)
Last reviewed Oct 17, 2026. Read how we verify. Found an error? Tell us.