Interest on the rental bond

The rental bond does accumulate interest. But don't expect you can get much even you have a few thousand dollars sitting with the bond board for quite some years.

Let's have a look what the legislation says:

Under Landlord and Tenant (Rental Bonds) Act 1977 No 44

11A Payment out of amount equivalent to interest

(1) This section applies to amounts paid out by the Board under section 11 on or after 1 January 1990 in respect of rental bonds lodged with the Board before, on or after that date.
(2) The total amount available to be paid out in respect of a rental bond is to include an amount equivalent to interest at the rate prescribed by the regulations for the time being:
(a) calculated on the minimum monthly balances from time to time of the rental bond held by the Board, and
(b) compounded as prescribed by the regulations.
(3) In subsection (2), minimum monthly balance means the minimum balance during January 1990 or any later, complete named month during which money in respect of a rental bond is held by the Board.


Landlord and Tenant (Rental Bonds) Regulation 2003
[2003-608]

10 Interest payable on rental bonds (section 11A)

(1) The object of this clause is to fix the rate at which interest is payable, and the period over which interest is to be compounded, on a rental bond that has been lodged with the Board.
(2) For the purposes of section 11A (2) of the Act:
(a) the prescribed rate at which interest is payable on a rental bond is the rate payable (as at the last day of the month for which the interest is being calculated) by the Commonwealth Bank of Australia on a Streamline Account balance of $1,000, and
(b) the interest payable on a rental bond is to be compounded on 30 June and 31 December in each year.


Now, what on earth is the interest rate?
Check this link: http://www.commbank.com.au/personal/accounts/streamline/rates-fees/
You will find that the intere rate the above talking about is: 0.01% p.a.

So if you have $5000 as a rental bond and leave it for 3 years. The accumulated interest on your bond in the end of 3 years is a 'mighty' $1.50. LoL!