What many of us forget, because there has been no interest payable on security deposits since 2009, is that there is actually a calculation that determines what the interest rate is. s.2 of the * Security Deposit Interest Regulation* lays out what that calculation, for convenience, the rate (for all agreements after 2004) is 3% less than the one year cashable GIC rate at ATB as of November 1 of the previous year.

So when we look at what is going on with interest rates (it's a great time to be saving money) we see that as of October 11, 2023 that rate is currently 4.6%, now that may change in either direction by the end of October as the Bank of Canada Expects to make another rate announcement on October 25, 2023, if the rates go up again, so too (probably) will GIC Rates at ATB and the 2024 Calculation will begin.

Now again for the landlords, prior to now (since 2009) there has been no interest rate, therefore no calculation, and no amount payable. s.45 of the * Residential Tenancies Act* lays out the payment obligations for Security Deposits. I'll discuss them very briefly (see the act for amplification of my intentionally simplified explanation)

The Landlord must pay the accrued interest to the tenant on an annual basis. (so lets make an assumption here, $2,000.00 at 1.6% for one year is $32.00)

The Landlord and tenant can make an agreement for the landlord to hold the interest, in this case the interest becomes a compounding interest on a yearly basis.

The landlord and tenant can agree on an interest rate that is higher than the Regulation rate, but not lower

Finally, the Landlord is entitled to any profit made on the interest amount above the Regulation/Agreed interest rate as the case may be.

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