Owning a Property

Deposit Protection Schemes, TDS, DPS and MyDeposits Compared

Every landlord who takes a tenancy deposit in England and Wales must protect it in a government-approved scheme. This guide compares TDS, DPS, and MyDeposits and explains your obligations.

Published: 16 Mar 2026 · Updated: 16 Mar 2026 · 5 min read

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Why Deposits Must Be Protected

The legal requirement to protect tenancy deposits in a government-approved scheme was introduced by the Housing Act 2004 and has applied to all Assured Shorthold Tenancies (ASTs) since 6 April 2007. The requirement exists to protect tenants from landlords who might otherwise unfairly withhold deposits at the end of a tenancy.

A landlord who fails to protect a deposit, or fails to provide the prescribed information, can be ordered by a court to pay the tenant compensation of between one and three times the deposit amount, and cannot serve a valid Section 21 notice (though Section 21 is being abolished under the Renters' Rights Act 2025).

The Three Government-Approved Schemes

There are three government-approved deposit protection schemes operating in England and Wales:

Scheme	Type options	Website
Tenancy Deposit Scheme (TDS)	Custodial and Insured	tenancydepositscheme.com
Deposit Protection Service (DPS)	Custodial and Insured	depositprotection.com
MyDeposits	Custodial and Insured	mydeposits.co.uk

All three schemes are approved by the government and offer equivalent statutory protection for tenants. The choice between them is largely a matter of preference, cost, and any arrangement made with a letting agent.

Custodial vs Insured Schemes

Each scheme offers two protection methods:

**Custodial scheme:** The landlord pays the deposit into the scheme's bank account, where it is held for the duration of the tenancy. At the end of the tenancy, the deposit is returned to the tenant (or distributed as agreed). This method is free of charge to landlords.

**Insured scheme:** The landlord retains the deposit in their own bank account. The scheme insures the tenant's right to receive the deposit back. The landlord pays an annual fee or per-tenancy fee to the scheme for this insurance. At the end of the tenancy, if there is a dispute, the landlord must pay the disputed amount to the scheme for adjudication.

Feature	Custodial	Insured
Who holds the money	The scheme	The landlord
Cost to landlord	Free	Annual or per-tenancy fee
Landlord access to funds during tenancy	No	Yes (own funds)
Interest on deposit	Scheme retains	Landlord may retain

Landlord Obligations

A landlord must, within **30 days** of receiving a deposit:

1. Protect the deposit in one of the three approved schemes

2. Provide the tenant with **Prescribed Information**, a specific set of details about the scheme used, how to raise a dispute, and the circumstances in which deductions may be made

Prescribed Information must be provided in writing and, for insured schemes, must be renewed each time the tenancy is renewed or becomes periodic. Failing to renew prescribed information when a fixed-term tenancy rolls into a statutory periodic tenancy is a common compliance error.

Deposit Cap

Under the Tenant Fees Act 2019, deposits are capped at:

**Five weeks' rent** where annual rent is less than £50,000
**Six weeks' rent** where annual rent is £50,000 or more

Any deposit taken in excess of these caps is an unlawfully charged prohibited payment.

Dispute Resolution

All three schemes offer a free Alternative Dispute Resolution (ADR) service to resolve disagreements about deposit deductions at the end of a tenancy, without the need for court proceedings. Either the landlord or the tenant can raise a dispute. The adjudicator makes a binding decision based on evidence submitted by both parties.