Michigan: Prejudgment Interest Rules
The short answer
Michigan uses one continuous formula for almost every civil judgment, contract or tort: interest runs from the date the complaint is filed all the way through the date the judgment is satisfied, with no separate switch to a different postjudgment rate. The default rate is 1% plus the average yield paid at 5-year U.S. Treasury note auctions over the prior six months, reset every January 1 and July 1 and compounded annually -- unless the judgment is on a written instrument (a note or contract) with its own specified rate, which controls instead, capped at 13%. Tort claims get one extra wrinkle contract claims don't: a party's rejected written settlement offer can cut off interest early or add 2 percentage points, depending on who made the offer. A judgment against the State of Michigan draws interest under the identical formula -- there's no government discount or bar.
| 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 | Default: 1% plus the average yield at auctions of 5-year U.S. Treasury notes over the preceding 6 months, certified by the State Treasurer and republished every January 1 and July 1 (the Treasury-yield component was 3.725% for the period starting January 1, 2026, making the total rate 4.725%), compounded annually. If the judgment is on a written instrument with its own specified rate, that rate applies instead, capped at 13%/yr compounded annually |
| 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 | Michigan does not bar or discount prejudgment interest against the state: MCL 600.6455 applies the identical filing-to-satisfaction, Treasury-note-based formula, including the same tort settlement-offer adjustments, to a judgment against the State of Michigan in the Court of Claims. An older version of § 6455 barred any interest before judgment for claims filed 1984-1987, but that historical rule doesn't reach any currently filed claim |
| 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 |
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The short answer
Most states draw a hard line between "prejudgment" interest (before the verdict) and "postjudgment" interest (after it), often under two separate statutes. Michigan doesn't: MCL 600.6013 runs one continuous interest calculation from the day the complaint is filed all the way to the day the judgment is actually paid off, whether the underlying claim is a contract dispute or a personal-injury case. The default rate resets every six months to 1% plus the average yield at recent 5-year U.S. Treasury note auctions, compounded annually — unless the judgment rests on a written instrument (a note, a contract with its own interest clause) that specifies its own rate, which controls instead, up to a 13% cap. Tort claims add one twist contract claims don't have: a party's rejected written settlement offer can cut interest off early or add 2 percentage points, depending on which side made the offer. Even a judgment against the State of Michigan itself follows this same formula — there's no special government carve-out reducing or barring it.
Requirements one by one
Governing law
Michigan's core interest statute is MCL 600.6013, part of the Revised Judicature Act, titled simply "Interest on money judgment." Unlike states that split contract and tort interest across separate chapters, § 6013 governs "a money judgment recovered in a civil action" generally, with a handful of tort-specific and medical-malpractice-specific subsections layered on top. A separate but nearly identical provision, MCL 600.6455, applies this same mechanism specifically to a judgment entered against the State of Michigan in the Court of Claims.
Interest rate
For most judgments, the rate isn't fixed — it's recalculated every six months as 1% plus the average yield paid at auctions of 5-year U.S. Treasury notes over the preceding six months, certified by the State Treasurer effective each January 1 and July 1. For the period starting January 1, 2026, the Treasury-yield component the state certified was 3.725%, making the effective total rate 4.725% for that period; a case that runs across several six-month intervals blends multiple rates together. That formula gives way, though, if the judgment is entered on a written instrument — a promissory note or a contract with its own stated interest rate — in which case the instrument's own rate controls (fixed at whatever rate was in effect when the complaint was filed, if the rate is variable), capped at 13% per year.
When interest starts running
The clock starts on the date the complaint is filed, not the date of the breach or the injury, and it runs all the way through until the judgment is satisfied — there's no separate reset at the moment of verdict. The one carve-out: interest doesn't accrue, for the window between filing and entry of judgment, on the "future damages" portion of a personal-injury verdict — damages a jury finds will only be incurred after its findings are made, like future medical costs or future lost earnings.
Contract vs. tort claims
Both kinds of claims run on the same underlying formula and the same filing-to-satisfaction period, but two things split them apart. First, a contract judgment resting on a written instrument with its own specified rate uses that rate instead of the floating Treasury-note formula; an ordinary tort verdict never has that option. Second, only a "civil action based on tort" is subject to the statute's settlement-offer mechanism: a defendant's rejected bona fide settlement offer can cut off further interest early, and a plaintiff's rejected bona fide offer can add 2 percentage points to the rate. Contract claims get none of that adjustment — they simply run at the base (or instrument) rate the whole way through.
Mandatory or discretionary
Interest under § 6013 is not something a court can decide to skip: the statute says it "is allowed" on a qualifying judgment and "is calculated" using its formula, with no discretionary opt-out. The only factual questions a court resolves are things like whether a settlement offer met the statute's "bona fide, reasonable" definition — not whether interest should be awarded in the first place.
Simple or compound
Every rate provision in § 6013 — and the parallel Court of Claims provision in § 6455 — states expressly that interest is "compounded annually." There's no simple-interest option anywhere in Michigan's general judgment-interest scheme.
Claims against the government
A claim against the State of Michigan, litigated in the Court of Claims, runs on MCL 600.6455, which mirrors § 6013's filing-to-satisfaction, Treasury-note-based formula (including the identical tort settlement-offer adjustments) almost word for word. An earlier version of § 6455 flatly barred any interest before judgment on claims filed between July 9, 1984 and January 1, 1987 — but that historical window has long since closed, and it has no effect on a claim filed today.
Other exceptions
A handful of narrower rules round out the statute. Interest under § 6013(8) is calculated on the entire money judgment, including any awarded attorney fees and costs — not just the underlying damages — except that in a medical malpractice action, costs or attorney fees awarded under a statute or court rule don't draw interest for any period before judgment is entered. And the tort settlement-offer mechanism cuts both ways with precise thresholds: a defendant's offer only counts as "bona fide" if it's at least 90% of what the plaintiff eventually recovers, while a plaintiff's offer only counts if it's no more than 110% of that eventual recovery — guess wrong on either side and the adjustment doesn't apply.
What trips people up
The biggest surprise for people used to other states is that Michigan doesn't stop the prejudgment clock at the verdict and start a new postjudgment rate — it's one continuous calculation from the filing of the complaint to the day the judgment is actually paid. A case that drags on for years accrues interest the whole time, recalculated every six months as the Treasury-note rate moves.
The settlement-offer mechanism is easy to get backward: it's the tort side, not the contract side, that has this adjustment, and it depends on which party made the rejected offer and whether that offer actually met the statute's percentage threshold. A defendant who makes a lowball "settlement offer" that comes in under 90% of the eventual verdict gets no interest-limiting benefit from it at all.
People also tend to assume future damages (like a structured award for a lifetime of future medical care) accrue interest just like the rest of the judgment. They don't, for the prejudgment period — the statute strips that specific piece out.
Common questions
Does Michigan have separate prejudgment and postjudgment interest rates?
Not really — MCL 600.6013 treats them as one continuous period, running the same formula from the date the complaint was filed through the date the judgment is finally satisfied, rather than switching rates the moment judgment is entered.
What's Michigan's current interest rate?
It isn't fixed by the statute itself — it resets every six months to 1% plus the average 5-year Treasury note auction yield from the prior six months, as certified by the State Treasurer. The Treasury-yield component certified for the period starting January 1, 2026 was 3.725%, making the effective rate 4.725% for that period.
Does a contract with its own interest rate use that rate instead?
Yes, if the judgment is entered on a written instrument (a note, a loan agreement, a contract clause) with its own specified interest rate, that rate controls instead of the floating Treasury-note formula — capped at 13% per year, compounded annually.
Can I get prejudgment interest suing the State of Michigan?
Yes. Michigan doesn't bar or discount interest against the state — a Court of Claims judgment runs on MCL 600.6455, which applies essentially the same formula as an ordinary private-party judgment.
Statutes and sources
- MCL 600.6013(1) (future damages exclusion) — "Interest is allowed on a money judgment recovered in a civil action, as provided in this section. However, for complaints filed on or after October 1, 1986, interest is not allowed on future damages from the date of filing the complaint to the date of entry of the judgment." Accessed 2026-07-05: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013
- MCL 600.6013(7) (written-instrument rate) — "interest is calculated from the date of filing the complaint to the date of satisfaction of the judgment at the rate specified in the instrument if the rate was legal at the time the instrument was executed. ... The rate under this subsection shall not exceed 13% per year compounded annually." Accessed 2026-07-05: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013
- MCL 600.6013(8) (default Treasury-note formula) — "interest on a money judgment recovered in a civil action is calculated at 6-month intervals from the date of filing the complaint at a rate of interest equal to 1% plus the average interest rate paid at auctions of 5-year United States treasury notes ... and compounded annually." Accessed 2026-07-05: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013
- MCL 600.6013(9), (10), (13) (tort settlement-offer adjustments) — quoted in full above. Accessed 2026-07-05: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013
- MCL 600.6013(15)(a) (bona fide offer definition) — the 90%/110% thresholds quoted above. Accessed 2026-07-05: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-6013
- MCL 600.6455(1), (2) (Court of Claims parallel provision) — quoted in full above. Accessed 2026-07-05: https://www.legislature.mi.gov/documents/mcl/pdf/mcl-600-6455.pdf
- MCL 600.6301(a) ("future damages" defined) — "damages arising from personal injury which the trier of fact finds will accrue after the damage findings are made and includes damages for medical treatment, care and custody, loss of earnings, loss of earning capacity, loss of bodily function, and pain and suffering." Accessed 2026-07-05: https://www.legislature.mi.gov/documents/mcl/pdf/MCL-236-1961-63.pdf
Source links
Every statute quoted above, linked, with the date we checked it.