Interest on security deposit

[cmr3923]

Does the landlord have right to charge an adminstrative fee on you security deposit?

My landlord recently sent me a statement showing the a/c where my security deposit is being held. The landlord charges 1% fee, and I make only .5%?
Does this seem fair and is it legal??

[consigliere]

General Obligations Law §7-103 authorizes a landlord to retain, as an administrative fee, 1% per year of the amount of rent held as a security deposit.
 

[Phil Cohen]

It's a huge landlord ripoff, but legal.
Incidentally I believe you can deduct the amount you didn't receive, so that you don't pay taxes on it.