Deposits
DPS vs TDS vs myDeposits: which scheme should you use?
Protecting a tenancy deposit is not optional. As soon as you receive a deposit from a tenant, you have 30 days to put it into a government-approved deposit protection scheme and serve the prescribed information. Miss that deadline and you face a penalty of between one and three times the deposit amount, lose the ability to use certain possession grounds, and hand your tenant grounds for a county court claim. What is optional is which of the three approved schemes you use. The Deposit Protection Service (DPS), the Tenancy Deposit Scheme (TDS) and myDeposits are all legitimate, all government-approved, and all offer essentially the same legal protection, but they differ in cost structure, how the money is held, the dispute resolution process, and practical features that matter to landlords managing properties at scale. This guide sets out an honest comparison so you can choose the right one for your portfolio.
Custodial vs insured: the two types of deposit protection scheme
Before comparing the three providers, it helps to understand the two fundamental types of scheme. Every provider offers one or both.
Custodial schemes
In a custodial scheme, you transfer the deposit to the scheme provider, who holds it in a segregated account for the duration of the tenancy. You do not hold the money yourself. At the end of the tenancy, you and the tenant agree what should be returned and what can be deducted, and the scheme pays out accordingly. If there is a dispute, the scheme's Alternative Dispute Resolution (ADR) service adjudicates.
Custodial schemes are free to use. The scheme provider earns revenue from interest on the pooled deposit funds. Any interest generated does not go to the landlord or the tenant in most cases, it funds the scheme's operations.
Best for - landlords who prefer simplicity, want zero ongoing cost, and are comfortable not having the deposit in their own account
Drawback - you cannot access the deposit quickly mid-tenancy; the money sits with the scheme until the tenancy ends
Insured schemes
In an insured scheme, you keep the deposit in your own bank account. You pay the scheme provider a fee, either per deposit or as an annual subscription, for insurance that covers the deposit amount. The insurance means that if you fail to repay the deposit correctly, the scheme can compensate the tenant and recover the money from you. Any interest earned on the deposit in your account is yours to keep.
Insured schemes require more discipline from the landlord. You must ensure the deposit is kept separately and remains available in full throughout the tenancy. If you accidentally spend it or cannot repay it at the end, the scheme will pay out to the tenant and pursue you for repayment.
Best for - landlords who want to keep the deposit in their own account, earn interest, and are comfortable managing the additional responsibility
Drawback - there is a cost per deposit or annual fee, and the landlord bears more administrative responsibility
For a full explanation of how deposit protection works and what the prescribed information must include, see our step-by-step guide to protecting a tenancy deposit.
Deposit Protection Service (DPS)
The Deposit Protection Service is run by Computershare Investor Services and is one of the three government-authorised deposit protection providers in England and Wales. It is available to individual landlords, portfolio landlords and letting agents.
DPS Custodial (free)
DPS Custodial is the free option. You transfer the deposit to DPS online, receive a deposit ID, and use that ID as part of the prescribed information you give your tenant. DPS holds the money for the duration of the tenancy.
At the end of the tenancy, you raise a repayment request on the DPS portal. If you and the tenant agree on how the deposit should be split, DPS pays out within a few working days. If there is a dispute, DPS's adjudication service handles it - for free, using the evidence both parties submit.
Cost - free
Registration - online, straightforward
Dispute resolution - DPS adjudication service, free to use
Interest - accrues to DPS, not landlord or tenant
Repayment speed - typically 3-5 working days after agreement
DPS Insured (paid)
DPS Insured allows you to keep the deposit in your own bank account. You pay a per-deposit protection fee. The fee varies but is typically in the range of £13-£30 per deposit, depending on the deposit amount. Protect as many or as few deposits as you need - there is no annual subscription.
The insured product suits landlords who prefer a pay-as-you-go approach and do not want to commit to an annual membership.
Cost - per-deposit fee (no annual subscription required)
Dispute resolution - same DPS adjudication service as the custodial product
Interest - accrues to landlord on funds held in own account
DPS: who it suits best
DPS works well for individual landlords with a small number of properties who want a no-cost custodial solution. The online portal is straightforward and the per-deposit insured option is good for landlords who want flexibility without a subscription commitment. DPS's dispute resolution service is well-regarded and has a large volume of cases, which means consistent adjudication outcomes.
Tenancy Deposit Scheme (TDS)
The Tenancy Deposit Scheme is run by The Dispute Service Ltd and is the oldest of the three government-authorised providers, having been established in 2003. It originally served the professional letting agent sector but now also offers a product directly for landlords. TDS operates in England and Wales.
TDS Custodial (free)
TDS Custodial is free for landlords to use. As with DPS Custodial, you transfer the deposit to TDS, receive a deposit certificate number, and use this as part of the prescribed information. The process is straightforward and handled through the TDS online portal.
TDS has invested significantly in its landlord-facing educational resources, including the TDS Academy - a free online training resource covering deposit protection rules, what constitutes a fair deduction, and how to evidence claims in a dispute. For newer landlords especially, this is a genuine differentiator.
Cost - free
Registration - online via the TDS landlord portal
Dispute resolution - TDS adjudication service, free to use
Educational resources - TDS Academy, free online training
Repayment speed - typically 3-5 working days after agreement
TDS Insured (paid)
TDS Insured operates on an annual membership model. Landlords pay an annual fee and can then protect deposits throughout the year. The membership fee is tiered based on the number of properties. There may also be a per-deposit protection fee on top of the membership. This structure suits larger portfolio landlords who want to protect multiple deposits over the course of a year without paying a separate fee for each one.
Cost - annual membership fee (tiered by portfolio size) plus per-deposit fees
Interest - accrues to landlord on funds held in own account
Dispute resolution - full TDS adjudication service
TDS: who it suits best
TDS is particularly well-suited to landlords who value education and support resources alongside the scheme itself. The TDS Academy is genuinely useful for anyone who is less experienced with deposit disputes or wants to strengthen their documentation practices. TDS Insured suits portfolio landlords with higher deposit volumes who benefit from the membership fee structure. The scheme is also widely used by professional managing agents, which matters if you work with agents on some properties - a shared scheme can simplify handovers.
myDeposits
myDeposits is run by Hamilton Fraser, part of the Propertymark group, and is available to landlords and letting agents in England, Wales and Northern Ireland. The Northern Ireland availability is a distinction worth noting: DPS and TDS only cover England and Wales, so for landlords with properties in Northern Ireland, myDeposits is the relevant scheme.
myDeposits Custodial (free)
myDeposits Custodial is a free scheme where the deposit is held by myDeposits for the duration of the tenancy. The registration and management process is handled through the myDeposits online portal. At the end of the tenancy, repayment is requested online and processed once both parties confirm the split, or following adjudication in the case of a dispute.
Cost - free
Geographic coverage - England, Wales and Northern Ireland
Dispute resolution - myDeposits adjudication service, free to use
myDeposits Insured (paid)
myDeposits Insured allows landlords to keep the deposit in their own account and pay for insurance protection. myDeposits offers both an annual subscription model and a per-deposit option, depending on the landlord's preference and portfolio size. The insured product is the scheme's original and most widely used product.
Cost - annual subscription or per-deposit fee options available
Interest - accrues to landlord on funds held in own account
Dispute resolution - myDeposits adjudication service
myDeposits: who it suits best
myDeposits is the natural choice for landlords with properties in Northern Ireland. For those only operating in England and Wales, it competes directly with DPS and TDS. myDeposits has strong relationships with the professional letting agent market via its Propertymark connection, which can be useful if you manage some properties through agents. The insured product's flexibility on pricing models (annual or per-deposit) is practical for landlords whose portfolio size varies.
DPS vs TDS vs myDeposits: side-by-side comparison
Here is a summary of the key differences between the three schemes to help you make a direct comparison.
Custodial (free) option availability
DPS - yes, DPS Custodial is free
TDS - yes, TDS Custodial is free
myDeposits - yes, myDeposits Custodial is free
Insured option pricing model
DPS - per-deposit fee, no annual subscription required
TDS - annual membership (tiered by portfolio) plus per-deposit fees
myDeposits - both annual subscription and per-deposit options available
Geographic coverage
DPS - England and Wales only
TDS - England and Wales only
myDeposits - England, Wales and Northern Ireland
Dispute resolution
All three schemes use an Alternative Dispute Resolution (ADR) service for contested end-of-tenancy deposit claims. The ADR process is free to both parties and involves submitting evidence to an independent adjudicator, who makes a binding decision. The process is broadly similar across all three providers. Adjudicators look at:
The tenancy agreement, specifically the tenant obligations clause
The check-in inventory and condition report
The check-out report and photographs
Receipts or quotes for repairs and cleaning
Correspondence between landlord and tenant about the issue
The quality of your evidence matters far more than which scheme you use. A landlord with a thorough, dated check-in report and photographs will succeed in disputes regardless of provider; a landlord without this evidence will struggle at all three.
For detailed guidance on how to handle a deposit dispute and what evidence to prepare, see our article on how to handle tenancy deposit disputes fairly.
Switching between schemes
You can switch deposit protection schemes at any time between tenancies. You cannot switch the protection for a live deposit without re-protecting the deposit in the new scheme and serving fresh prescribed information to the tenant within 30 days of making the change. This is a complication most landlords avoid by sticking with one scheme across their portfolio. If you want to switch, do it at the start of a new tenancy rather than mid-tenancy.
How to choose the right deposit protection scheme
There is no objectively 'best' scheme - the right one depends on your circumstances. Here is a practical decision framework.
Choose a custodial scheme if:
You want zero cost and have no strong preference about holding the deposit
You have a small portfolio and a simple letting model
You want the scheme to bear the administrative responsibility for holding the funds securely
You are new to landlording and want the most straightforward option
Choose an insured scheme if:
You want to keep the deposit in your own account and earn interest on it
You have a larger portfolio and want to manage cash flow more actively
You are comfortable with the additional discipline required to keep deposits separate and available
Choose DPS if:
You want a free custodial scheme with a simple per-deposit insured option and no subscription commitment
You manage a small to medium portfolio without a letting agent
Choose TDS if:
You value educational resources and want access to the TDS Academy
You have a larger portfolio and the annual membership fee structure works out cheaper than per-deposit fees
Your letting agent already uses TDS, so using the same scheme simplifies handovers
Choose myDeposits if:
You have properties in Northern Ireland as well as England and Wales
You want the flexibility of both annual subscription and per-deposit pricing
Your managing agent is affiliated with Propertymark
The rules that apply regardless of which scheme you choose
Whichever scheme you use, the following legal obligations are identical and non-negotiable.
The 30-day deadline
You must protect the deposit and serve the prescribed information within 30 days of receiving it. The clock starts from the date you receive the money, not from the tenancy start date. If a tenant pays their deposit two weeks before they move in, your 30-day window starts from the payment date.
Prescribed information
You must give the tenant (and any relevant third party who paid the deposit) written prescribed information that includes: the address of the property, the deposit amount, the name and contact details of the scheme, how to apply for release of the deposit, the scheme's dispute resolution process, and what happens if a dispute cannot be resolved through the scheme.
Each scheme provides a template for the prescribed information, or you can use your own format provided it contains all required elements. Many landlords combine the prescribed information with the tenancy agreement as an appendix.
Deposit limits
Under the Tenant Fees Act 2019, the maximum deposit you can take is five weeks' rent for properties with annual rent below £50,000, and six weeks' rent for properties with annual rent of £50,000 or above. Taking a deposit above this limit is a prohibited payment and can result in a fine.
Penalties for non-compliance
If you fail to protect the deposit or fail to serve the prescribed information within 30 days, a tenant can apply to the county court for a penalty order. The court must order you to repay the deposit and can award a penalty of between one and three times the deposit amount. The court also has discretion on the penalty multiple based on the circumstances, including how promptly you remedied the breach.
The full process for protecting a deposit, including what to include in the prescribed information and how to handle re-protection on renewal, is covered in our step-by-step deposit protection guide.
Deposit protection and the Renters' Rights Act 2026
The Renters' Rights Act 2025 does not change the deposit protection scheme framework or the requirement to use one of the three approved providers. The 30-day deadline, prescribed information requirement and deposit cap all remain in place.
The key change relevant to deposit protection is the abolition of fixed-term tenancies. Previously, some landlords re-protected deposits and re-served prescribed information at the start of each new fixed-term renewal. With periodic tenancies now the only option, there are no renewal points - the original protection runs for the life of the tenancy, however long that is. You do not need to re-protect or re-serve prescribed information simply because the tenancy rolls from one month to the next.
The one situation where re-protection is required is if the deposit amount changes, for example, if rent increases substantially and the parties agree to increase the deposit to match the new five-week cap. In this case you must re-protect the increased amount and serve fresh prescribed information.
For everything else changing from May 2026, see our Renters' Rights Act post-commencement landlord guide.
Frequently asked questions
Can I use more than one scheme across my portfolio?
Yes. You can use different schemes for different properties if you wish. There is no rule requiring a landlord to use the same scheme across all tenancies. However, using a single scheme simplifies administration, one login, one dispute process, one set of forms. Most landlords choose one scheme and stick with it across their entire portfolio.
What happens to the deposit if the scheme provider goes bust?
All three government-approved schemes are required to hold custodial deposits in ring-fenced, segregated accounts that are not accessible to the scheme operator's creditors. In the event of insolvency, the deposits would be protected and returned to landlords and tenants. The government approval process includes financial stability requirements specifically to address this risk.
Can a joint tenant claim against the deposit protection separately?
In a joint tenancy, the deposit is treated as belonging to the tenancy, not to individual tenants. A single repayment request covers all tenants. If tenants disagree among themselves about how to split the returned deposit, that is a matter between them, the landlord deals with the tenancy as a whole. It is good practice to have a lead tenant named on correspondence to avoid conflicting instructions.
Do I need to protect a holding deposit?
No. A holding deposit, paid to reserve a property before the tenancy starts, is not a tenancy deposit and does not need to be protected in a government-approved scheme. However, it is subject to its own rules under the Tenant Fees Act 2019, including caps and strict timelines for return or retention.
For the differences between a tenancy deposit and a holding deposit, see our article tenancy deposit vs holding deposit: what is the difference?
Is the dispute resolution decision final?
The ADR decision is binding on both parties once accepted. If either party does not accept the scheme's decision, they can take the dispute to the county court instead - but this is rarely done in practice. Court proceedings are slower, more expensive, and introduce uncertainty. The ADR process is specifically designed as a fast, free alternative to court.
What if the tenant disputes the deposit before I register it?
You must register the deposit regardless of any pre-tenancy dispute. Failing to protect because of an anticipated dispute is not a defence in court and will compound the problem. Protect the deposit within 30 days, serve the prescribed information, and then raise any tenancy deposit dispute separately through the scheme's ADR process when the tenancy ends.
Key takeaways
All three schemes - DPS, TDS and myDeposits - are government-approved and provide identical legal protection. The differences are in cost, geography and practical features
Custodial schemes (all three offer them) are free to use; insured schemes allow the landlord to keep the deposit but charge a fee
For Northern Ireland properties, myDeposits is the only option - DPS and TDS only cover England and Wales
DPS suits landlords who want a simple free custodial scheme or a per-deposit insured option with no annual subscription
TDS suits landlords who value educational resources (TDS Academy) or have larger portfolios where the annual membership fee works out cheaper
myDeposits suits landlords wanting pricing flexibility or a Propertymark connection through their managing agent
The quality of your deposit evidence - check-in report, photos, checkout report - matters far more than which scheme you choose when disputes arise
Whichever scheme you use, protect within 30 days of receipt and serve prescribed information to avoid penalties of up to three times the deposit
This article is intended for general informational purposes only and does not constitute legal, financial, or professional advice. Landlord and tenant law is subject to change, and the information in this article reflects the position at the time of writing. You should always seek independent legal or professional advice before taking any action in relation to your property or tenancy.
Author
August Team
The August editorial team lives and breathes rental property. They work closely with a panel of experienced landlords and industry partners across the UK, turning real-world portfolio and tenancy experience into clear, practical guidance for small landlords.
