By New York State law, landlords are required to pay annual interest to people on their security deposits. My security deposit was slightly over $2500.
I got $0.18 for 2006’s interest. (Yes, they actually sent an 18-cent check.) Granted, they only had it for 6 months, not the full year… but still, how exactly is this money invested? That’s a 0.0072% interest rate. Even assuming that they want too much flexibility and too little risk for a CD, the absolute worst bank savings account they could find would have yielded at least 1.5%.
This year, I got a check for $2.00. That’s a huge improvement! 0.08%! (…for the whole year.)
Of course, any idiot could have bought a 1-year CD instead, which offered about 5% when I renewed my lease. That would have given me $125 every June.
I have no idea how this is invested… what money-holding method pays interest at all, but at such low rates?
Thanks Keystone Realty Associates!