The City of Boulder has calculated the interest rate for tenant security deposits for the 2016 calendar year to be 0.16 percent, effective Friday, Jan. 1, 2016. This is the mathematical average of the one-year certificate of deposit from the top three financial institutions in Boulder, based on market share data as of Dec. 15, 2015. The interest rate on the security deposit is determined by the rate in effect at the time the security deposit money is received. It has nothing to do with when the deposit money is returned. Payment of interest on security deposits is a legal requirement in effect for all properties in the City of Boulder. Rate is established by the city about Dec 15, and is an average of a one year CD at three Boulder institutions, the two largest Boulder Banks and the largest Credit union.
What will this mean for landlords?
Prior to 2004 is has always been 5.5%. the idea was to keep it fair and to pay what the market yield is (The market being average of a one year CD at three Boulder institutions, the two largest Boulder Banks and the largest Credit union)
How does this rate compare to the previous year?
It is the same, please see below for the historical rates: Jan 1 – Dec 31 2015 .16%. Jan 1 – Dec 31 2014 .17%. Jan 1 – Dec 31 2013 .25%. Jan 1 – Dec 31, 2012: .30% Jan 1 – Dec 31, 2011: .35% Jan 1 – Dec 31, 2010: .43% Jan 1-Dec 31, 2009 1.88% Jan 1-Dec 31, 2008 3.69% Jan 1-Dec 31, 2007 3.89% Jan 1- Dec 31, 2006 3.01% Jan 1 – Dec 31, 2005: 1.85% April 1 – Dec 31, 2004: 1.08% Prior to April 1, 2004: 5.5%
What will this mean for tenants?
Same for the tenant, the market is what the tenant will make on their security deposit that is being held by the landlord.