UK Deposit Protection Schemes Compared: TDS vs MyDeposits vs DPS

For Assured Shorthold Tenancies (AST) and post-RRA 2025 assured tenancies in England and Wales, deposit protection is statutory. Sections 212–215 of the Housing Act 2004 require a landlord to protect a tenant’s deposit in one of three government-authorised schemes within 30 days of receipt and to provide prescribed information in the same period. This FAQ compares the three authorised schemes — DPS (Deposit Protection Service), TDS (Tenancy Deposit Scheme), and MyDeposits — and explains the practical differences a landlord should weigh before choosing.

Q1. Why is deposit protection mandatory?

The duty arises from section 213 of the Housing Act 2004 (as amended by the Localism Act 2011 and subsequent regulations). Failure to protect or to provide prescribed information triggers:

• A penalty award of 1× to 3× the deposit to the tenant under section 214(4)
• Inability to serve a Section 21 notice until protection is rectified (Section 21 itself is now abolished by RRA 2025 in England, but the principle applies to remaining notices)
• Continuing liability even after the deposit is returned (in some circumstances)

Primary source: https://www.legislation.gov.uk/ukpga/2004/34/part/6/chapter/4

Q2. What are the three authorised schemes?

The Secretary of State authorises schemes under section 212(1). The current three authorised schemes are:

A separate scheme covers Scotland (SafeDeposits Scotland, MyDeposits Scotland, Letting Protection Service Scotland) under different legislation, and Northern Ireland (TDSNI, DPS NI, MyDeposits NI).

Q3. Custodial vs Insured — what’s the difference?

Custodial

The landlord transfers the deposit to the scheme. The scheme holds it for the duration of the tenancy. At the end, the scheme releases funds based on landlord-tenant agreement or scheme adjudication. Free to the landlord.

Insured

The landlord retains the deposit but pays a per-tenancy fee to the scheme. The scheme insures the tenant’s interest. At end of tenancy, the landlord must refund within agreed timescales; if not, the scheme pays the tenant and recovers from the landlord. Paid (typically £15–£35 per tenancy in 2026).

Q4. Which scheme is most popular?

By volume, the DPS Custodial is the largest. However:

• DPS dominates custodial because of its scale and the easy-to-use online portal
• TDS is favoured by professional letting agents for its insured product and adjudication quality
• MyDeposits appeals to portfolio landlords for its accountancy integrations

All three meet the same statutory minimum standards.

Q5. What information must be provided to the tenant?

Under the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (SI 2007/797), within 30 days of receipt the landlord must provide:

• Name and contact details of the scheme administrator
• Amount of the deposit
• Address of the property
• Tenant’s name and contact details
• Details of any third-party contributors (e.g., guarantor)
• Circumstances in which all or part of the deposit may be retained
• The tenant’s signed certification that the information is accurate
• The relevant scheme’s leaflet or summary of how the scheme works

Most schemes provide a downloadable Prescribed Information Form that, once filled and counter-signed, satisfies the statutory requirement.

Reference: https://www.gov.uk/tenancy-deposit-protection

Q6. What is the timeline?

Timing is critical. The 30-day clock under section 213 is non-extendable.

Q7. Adjudication — what happens if there’s a dispute?

All three schemes offer free alternative dispute resolution (ADR) under section 213(8). The process:

1. Either party requests ADR
2. Landlord and tenant submit evidence (inventory, check-out report, photos, invoices, correspondence)
3. An independent adjudicator decides on the balance of evidence
4. The decision is binding if both parties agreed to ADR

Statistics from the schemes’ annual reports show the average award favours the tenant by margin where the landlord has failed to provide a dated, signed inventory or a check-in/check-out report. Documentation is everything.

Q8. What about deposits over the statutory cap?

The Tenant Fees Act 2019 caps deposits at:

• 5 weeks’ rent if annual rent is below £50,000
• 6 weeks’ rent if annual rent is £50,000 or above

Excess deposit is unlawful and recoverable by the tenant under section 4 of the Tenant Fees Act 2019.

Primary source: https://www.legislation.gov.uk/ukpga/2019/4/contents

Q9. RRA 2025 — what changes?

The Renters’ Rights Act 2025 makes minor changes:

• Holding deposits capped at 1 week (already in TFA 2019, restated)
• Database of landlords includes deposit-protection compliance history
• Ombudsman membership is mandatory; failures to protect can be addressed by the Ombudsman as well as by the courts

The substantive deposit protection regime under sections 212–215 is unchanged.

Reference: https://www.gov.uk/government/collections/renters-rights-bill

Q10. What if I forgot to protect on time?

Late protection does not “cure” the breach for penalty purposes — but if you protect before the tenant issues proceedings, the 3× penalty is unlikely to apply (the court can award 1× to 3× and considers the seriousness of the breach). Best practice:

1. Protect immediately on discovering the breach
2. Provide prescribed information immediately
3. Document the date of receipt and the date of protection
4. Consider a goodwill gesture to the tenant

A Section 8 notice (post-RRA 2025) may still be served for grounds other than rent arrears, even if a deposit breach exists, but the tenant can counter-claim for the penalty under section 214.

Q11. Can I use one scheme for some properties and another for others?

Yes. There is no requirement to use the same scheme across a portfolio. Many professional landlords use:

• DPS Custodial for new tenancies
• TDS Insured for tenancies inherited from previous management

Q12. What if the tenant pays the deposit through a third party (e.g., relocation company, parent)?

The third party must be named in the prescribed information as a “relevant person” under regulation 2 of SI 2007/797. The deposit is still the tenant’s deposit for legal purposes, but the third party has a parallel claim at end of tenancy.

Conclusion — Choose for Process Fit, Not Brand

All three schemes — DPS, TDS, MyDeposits — meet the statutory minimum and offer free dispute resolution. The differentiation is in user experience, integrations, and the fees on the insured option. For a single-property private landlord, DPS Custodial is usually the simplest. For a portfolio landlord with letting agents, TDS Insured offers richer professional tooling. For tech-forward landlords, MyDeposits’ integrations may win.

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Disclaimer

Legal information, not legal advice. MmowW Scrib🐮 is operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not UK solicitors.

Sources

• Housing Act 2004 Part 6 Chapter 4: https://www.legislation.gov.uk/ukpga/2004/34/part/6/chapter/4
• Tenancy Deposit Protection: https://www.gov.uk/tenancy-deposit-protection
• Tenant Fees Act 2019: https://www.legislation.gov.uk/ukpga/2019/4/contents
• Renters’ Rights Bill collection: https://www.gov.uk/government/collections/renters-rights-bill