DROP AnswersWhat interest rate does a DROP account earn?
DROP interest rate
- DROP accumulations earn an effective annual rate of 4.00%, compounded monthly on the prior month's accumulated balance. [FRS 2026 DROP Guide, p.6]
- Members with a DROP begin date through June 30, 2023 earned 1.30% effective annual interest, compounded monthly. [FRS 2026 DROP Guide, p.6]
- Benefits on deposit for less than one month, or after DROP participation ends, do not earn interest. [FRS 2026 DROP Guide, p.7]
- The interest is tax-deferred: you pay any taxes owed when you receive it. [FRS 2026 DROP Guide, p.3]
- Use the Create Estimate tool in FRS Online to project your DROP accumulation. [FRS 2026 DROP Guide, p.8]
Related DROP answers
- Who is eligible for Florida DROP?
- How long can you stay in DROP? (96 months, not 60)
- DROP termination and the 6-month reemployment rule
- DROP payout options: lump sum, rollover or both
- How does DROP affect your FRS pension?
- How to apply for DROP with Form DP-11
- DROP: Investment Plan vs Pension Plan
- DROP for Special Risk vs Regular Class
- DROP beneficiaries, death and divorce
Educational information only, based on official Florida Retirement System (frs.fl.gov) publications. Not affiliated with the State of Florida or the Division of Retirement. Chapter 121, F.S., and Chapter 60S, F.A.C., are the final authority. Confirm your situation with the Division of Retirement (850-907-6500 / 844-377-1888). [FRS 2026 DROP Guide, p.2]