If no proceedings are pending to enforce the liability of the principal on the deposit, the officer shall:
§ 995.740.Payment of Interest Or Delivery of Interest Coupons Upon Demand
Title 14. Of Miscellaneous Provisions · Chapter 2. Bonds and Undertakings · Article 7. Deposit in Lieu of Bond · Last amended 2015 · Last verified July 28, 2026
In one sentenceSection 995.740 requires the officer, whenever no proceedings are pending to enforce liability on a deposit, to pay the principal any earned interest quarterly on demand and to deliver or pay any interest coupons or interest due on deposited bonds or notes as they come due.
Full Text of § 995.740
(a) Pay quarterly, on demand, any interest on the deposit, when earned in accordance with the terms of the account or certificate, to the principal.
(b) Deliver to the principal, on demand, any interest coupons attached to bonds or notes, including bearer bonds and bearer notes, as the interest coupons become due and payable, or pay annually any interest payable on the bonds or notes.
Plain-English Summary
A deposit held in lieu of a bond can still earn income while it sits with the officer, and this section makes sure the principal receives it -- as long as no one is trying to collect against the deposit. If nothing is pending to enforce the principal's liability, the officer must pay out, quarterly and on demand, any interest the deposit has earned under the terms of the account or certificate.
For deposits made in bonds or notes rather than cash, the officer has a parallel duty: deliver interest coupons to the principal on demand as they become due and payable, or, for bonds and notes without separate coupons, pay the interest annually as it accrues.
Once proceedings to enforce liability on the deposit do get underway, this section's interest-payment duties give way to § 995.760's collection procedure, which distributes the deposit itself -- including any accrued interest -- toward satisfying that liability.
Frequently Asked Questions
Does the principal get to collect interest on a cash deposit held instead of a bond?
Yes, the officer must pay any earned interest quarterly on demand, so long as no proceedings are pending to enforce liability on the deposit.
What about interest on deposited bonds or notes?
The officer must deliver interest coupons on demand as they become due, or pay the interest annually if the bonds or notes have no separate coupons.
What happens to this interest-payment duty once someone tries to enforce liability on the deposit?
Section 995.740 stops applying, and § 995.760's collection procedure governs instead.
Amendment History
Amended by Stats 2014 ch 305 (AB 1856),s 3, eff. 1/1/2015.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as: interest on cash deposit bond californiainterest coupons deposited bonds california