Security Deposit Interest in Pennsylvania: Interest earned in (2026)
Pennsylvania state law (Landlord and Tenant Act of 1951, § 512, 68 P.S. § 250.512) requires landlords to pay interest on a security deposit over … Calculator, statute citation, Last Verified date o
Quick answer
Yes — Pennsylvania requires landlords to pay interest on qualifying security deposits. Pennsylvania state law (Landlord and Tenant Act of 1951, § 512, 68 P.S. § 250.512) requires landlords to pay interest on a security deposit over $100 once the tenancy passes two years — the deposit must be placed in an interest-bearing bank account and the tenant receives the interest each year, minus 1% retained by the landlord. The rule comes from 68 P.S. § 250.512 (Landlord and Tenant Act of 1951, § 512). State statute (official text) · 2026-10-28
Calculator pre-loaded with this state:
The current rate in Pennsylvania
Pennsylvania does not fix the rate in the statute — it moves with a benchmark: PA Law Help (official legal-aid resource): 'If you have lived in a place more than two years and your deposit was more than $100, your landlord must put your deposit in a bank account which earns interest.. At the end of the third year of your lease, and each year after that, you get the interest, minus 1% to cover the landlord's expenses.' Example given: $500 deposit earning 5% → tenant receives $20/year (4%), landlord keeps $5 (1%). A landlord may alternatively post a bond guaranteeing return with interest. Whether the statute fixes a minimum rate (6% claim by one law-firm blog): (to be verified)..
Because the benchmark resets periodically, always check the current published value before relying on an older figure. Where we have confirmed the current value against the official announcement, the calculator above applies it; where we have not, the calculator says so instead of guessing.
How interest must be paid
Simple annual interest (per sources reviewed; no compounding mentioned) Annually, starting at the end of the third year of the lease and each year thereafter (or credited against rent due, per secondary sources); deposit steps down from 2 months' rent (year 1) to 1.5 (year 2) to 1 month (year 3+)
Who the law applies to
Residential tenancies; trigger = tenancy longer than 2 years AND security deposit over $100 (interest owed from the 25th month onward)
Cities that add their own rules
Philadelphia (Philadelphia Code § 9-804) and Pittsburgh require landlords of buildings with 3+ rental units to hold deposits in escrow accounts at federally insured institutions (city-level escrow enhancements; Philadelphia statute reference surfaced via search only — see unverified_flags).
How Pennsylvania compares in the Northeast
| State | Rate | Rule |
|---|---|---|
| Connecticut | Not less than the 'deposit index' for that year as defined in C.G.S. § | interest required |
| Delaware | — | no statewide requirement |
| District of Columbia | Interest accrued in the interest-bearing escrow account at the prevail | interest required |
| Maine | — | no statewide requirement |
| Massachusetts | 5% per annum, or the lesser amount of interest actually received from | interest required |
| New Hampshire | Interest at the rate paid on regular savings accounts at the bank wher | interest required |
| New Jersey | Interest actually earned in the NJ interest-bearing account (no statew | interest required |
| New York | Interest actually accrued/paid on the deposit in the interest-bearing | interest required |
| Pennsylvania | Interest earned in the bank escrow account, with the landlord retainin | interest required |
| Rhode Island | — | no statewide requirement |
| Vermont | — | no statewide requirement |
The statute behind it
| Field | Value | | --- | --- | --- | | Citation | 68 P.S. § 250.512 (Landlord and Tenant Act of 1951, § 512) | | Official text | www.palawhelp.org | | Last verified | 2026-10-28 |
Cross-checked against: PA Law Help (palawhelp.org, legal aid) — Security Deposits (§ 250.512 mechanics: 2-year trigger, $100 threshold, 1% admin fee, annual payment), Gibbs & Perk (Ohio/PA landlord-tenant firm) — 'The Rules of Security Deposits' (PA interest from 25th month; corroborating secondary).
Statutes get amended. If you are relying on this page — for a move-out, a dispute, or a lease draft — click through to the official text and confirm the current wording.
FAQ
Does Pennsylvania require landlords to pay interest on security deposits?
Yes. Under 68 P.S. § 250.512 (Landlord and Tenant Act of 1951, § 512), qualifying landlords in Pennsylvania must pay interest — currently Interest earned in the bank escrow account, with the landlord retaining 1% per year as an administrative fee (tenant receives the balance); one secondary source describes a 6% per year rate — unverified. Residential tenancies; trigger = tenancy longer than 2 years AND security deposit over $100 (interest owed from the 25th month onward)
How is deposit interest calculated in Pennsylvania?
At Interest earned in the bank escrow account, with the landlord retaining 1% per year as an administrative fee (tenant receives the balance); one secondary source describes a 6% per year rate — unverified. Simple annual interest (per sources reviewed; no compounding mentioned) The calculator at the top of this page applies exactly this rule to your deposit amount and dates.
When do I get the interest?
Annually, starting at the end of the third year of the lease and each year thereafter (or credited against rent due, per secondary sources); deposit steps down from 2 months' rent (year 1) to 1.5 (year 2) to 1 month (year 3+)
Independent second source · 2026-10-28Related guides
- All states: security deposit interest by state · rent increase rules by state
- Tools: deposit interest calculator · rent increase calculator
- Neighboring states: Connecticut · Delaware
This page is information, not legal advice — see the full disclaimer.