Prejudgment Interest Rules in Michigan
At a glance
| Governing law | MCL 600.6013 (Revised Judicature Act) governs interest on a money judgment in an ordinary civil action: one statute covering both the 'prejudgment' and 'postjudgment' period as a single continuous calculation; the parallel MCL 600.6455 applies the same mechanism to a judgment against the State of Michigan in the Court of Claims |
|---|---|
| Interest rate | Ordinary rate: 1% plus the certified average yield at 5-year Treasury-note auctions, reset each January 1 and July 1 and compounded annually. The July 2026 yield component is 3.959%, making the July–December 2026 statutory rate 4.959%. A qualifying written indebtedness instrument uses its own legal rate, capped at 13% (MCL 600.6013(7)–(8)). |
| When interest starts running | From the date the COMPLAINT is filed (not the date of breach or injury) through the date the judgment is satisfied: one continuous period, not a prejudgment clock that stops at verdict. Exception: no interest accrues, for the period between filing and entry of judgment, on the 'future damages' portion of a personal-injury verdict |
| Contract vs. tort claims | Both claim types draw interest under the same base formula from filing to satisfaction, but two things differ: (1) a contract judgment on a written instrument with its own specified rate uses that rate instead of the Treasury-note formula; (2) only a tort judgment is subject to the statute's settlement-offer adjustment: interest can be cut off early if the defendant's bona fide written settlement offer is rejected by the plaintiff, or increased by 2 points if the plaintiff's bona fide offer is rejected by the defendant |
| Mandatory or discretionary | Mandatory. The statute says interest 'is allowed' and 'is calculated' on every qualifying money judgment; a court has no discretion to withhold it. The only judgment calls involved are factual, whether a settlement offer was 'bona fide' and 'reasonable', not whether to award interest at all |
| Simple or compound | Compounded annually: stated expressly in every rate provision of § 6013 and in the parallel Court of Claims section, § 6455 |
| Claims against the government | Court of Claims judgments against the State use MCL 600.6455(2): the same 1%-plus-Treasury-yield formula from complaint filing, compounded annually, with the separate tort-offer rules in subsections (4)–(6). |
| Other exceptions | No interest on the 'future damages' portion of a personal-injury judgment for the period between filing and entry of judgment (future medical costs, future lost earnings, etc., as defined in MCL 600.6301(a)); interest under § 6013(8) is computed on the ENTIRE judgment including awarded costs and attorney fees, except that medical-malpractice cost/fee awards draw no interest for any period before judgment; a tort defendant's bona fide settlement offer (at least 90% of the eventual recovery) that the plaintiff rejects and that is filed with the court cuts off further interest as of that filing, while a rejected bona fide plaintiff's offer (no more than 110% of the eventual recovery) triggers a 2-point rate increase from the date of rejection |
Requirements one by one
Governing law
MCL 600.6013(1) says interest “is allowed on a money judgment recovered in a civil action.” Subsection (8) supplies the ordinary rate and time period. The Court of Claims has a parallel rule for State judgments in § 600.6455.
Interest rate
The § 600.6013(8) rate is 1% plus the certified average yield at auctions of five-year U.S. Treasury notes during the preceding six months. Michigan's Treasurer published 3.959% for the period beginning July 1, 2026. Adding the statutory one percentage point gives 4.959% for July through December 2026. For a judgment on a written debt instrument with a specified legal rate, subsection (7) uses that rate instead, subject to its 13% annual cap.
When interest starts running
Subsection (8) calculates interest from filing the complaint at six-month intervals. The tort-offer rules in subsections (9)–(13) may change the end date or rate. Subsection (1) excludes future damages from interest between filing and entry of judgment.
Contract vs. tort claims
Both types of money judgment use the general formula. A written indebtedness instrument can qualify for the contract-rate rule in § 600.6013(7), while the settlement-offer adjustments in subsections (9)–(13) apply to a “civil action based on tort.”
Simple or compound
Section 600.6013(8) expressly says “compounded annually,” as does the State judgment rule in § 600.6455(2).
Claims against the government
For complaints filed since January 1, 1987, § 600.6455(2) uses the same 1%-plus-Treasury-yield formula for a money judgment in the Court of Claims. Its subsections (4)–(6) contain the tort settlement-offer adjustments.
Other exceptions
Under § 600.6013(8), the interest base includes attorney fees and costs. A medical-malpractice award of statutory or rule-based fees and costs does not draw interest before judgment. A qualifying defendant offer that the plaintiff rejects can stop tort interest when the offer is filed; a qualifying plaintiff offer that the defendant rejects can add two points from rejection. Subsection (15)(a) defines the offer thresholds as at least 90% of the plaintiff's eventual recovery for a defendant's offer and at most 110% for a plaintiff's offer.
What trips people up
The Treasury table publishes the yield component, not the full § 600.6013(8) judgment rate. Add the statute's one percentage point before calculating interest. A case spanning January or July may need more than one rate, while compounding occurs annually.
Common questions
Does interest start on the date of injury or breach? Section 600.6013(8) generally starts the calculation when the complaint is filed.
Does interest run on future medical costs before judgment? No. Section 600.6013(1), using § 600.6301(a)'s definition of future damages, excludes that portion between complaint filing and judgment entry.
Statutes and sources
- MCL 600.6013(1), (7)–(10), (13), (15)(a) — money-judgment interest, written instruments, rate formula, future damages, and tort offers. Accessed 2026-10-06: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013
- MCL 600.6455(1)–(2) — historical and current Court of Claims rates; the current subsection starts interest at complaint filing and compounds annually. Accessed 2026-10-06: https://www.legislature.mi.gov/documents/mcl/pdf/mcl-600-6455.pdf
- MCL 600.6301(a) — definition of “future damages.” Accessed 2026-10-06: https://www.legislature.mi.gov/documents/mcl/pdf/MCL-236-1961-63.pdf
- Michigan Department of Treasury, Interest Rates for Money Judgments — certified July 2026 yield component: “3.959%.” Accessed 2026-10-06: https://www.michigan.gov/taxes/interest-rates-for-money-judgments
Source links
Every statute quoted above, linked, with the date we checked it.
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