Deposit Protection Schemes Compared: TDS vs DPS vs MyDeposits (2026)
12 June 2026 · AgentCheck Editorial · 6 min read
Part of our UK Landlord Legal Guide
In England and Wales, landlords must protect a tenant's deposit in one of three government-approved schemes — TDS, DPS or MyDeposits — within 30 days, and serve the prescribed information. Each offers a free custodial option and a paid insured option. Fail to protect it and you face penalties of one to three times the deposit and a blocked eviction.
Deposit protection is one of the simplest legal duties to meet and one of the most expensive to get wrong. The rules are clear, the three schemes are free to use in their custodial form, yet unprotected deposits remain one of the most common reasons landlords lose possession claims. This guide compares the three schemes, explains custodial versus insured, sets out the cap and the deadlines, and walks through end-of-tenancy disputes. It covers England and Wales; Scotland has its own approved schemes.
What deposit protection is — and why it's the law
Since 2007, any deposit taken on an assured shorthold tenancy in England and Wales must be placed in a government-authorised tenancy deposit scheme. The aim is simple: to keep the tenant's money safe and to provide a free, independent service for resolving disputes over deductions at the end of the tenancy. You must protect the deposit and give the tenant the prescribed information — the scheme used, the deposit amount, the property, and how to get it back — within 30 days of receiving it.
The three schemes compared
There are three approved providers in England and Wales. All three are free to use as custodial schemes; they differ mainly in their insured pricing and membership perks.
| Scheme | Options | Notes |
|---|---|---|
| DPS (Deposit Protection Service) | Custodial & insured | The largest custodial scheme; the original free custodial provider. |
| TDS (Tenancy Deposit Scheme) | Custodial & insured | The longest-established scheme; widely used by agents. |
| MyDeposits | Custodial & insured | Backed by the NRLA, which offers members a discount on the insured option. |
All three are equally valid in law — choosing between them is about whether you want to hold the money yourself, and any membership discounts you can access. The decision that matters more is custodial versus insured.
Custodial vs insured: which to choose
Every scheme offers two models. With a custodial scheme you hand the deposit to the scheme, which holds it free of charge for the whole tenancy and returns it at the end based on what you and the tenant agree. With an insured scheme you keep the deposit in your own account and pay the scheme a fee to insure the tenant's right to get it back.
| Custodial | Insured | |
|---|---|---|
| Cost | Free | Annual or per-tenancy fee |
| Who holds the money | The scheme | You, the landlord |
| Best for | Most private landlords | Those wanting to retain the funds |
For most individual landlords the custodial route is the obvious choice: it is free, removes any temptation to spend the money, and takes the cash physically out of your hands so there is no question of it being unprotected. Insured schemes suit landlords who want the deposit working in their own account, but the fee and the extra responsibility rarely pay off for a small portfolio.
How much deposit can you take?
Since the Tenant Fees Act 2019, deposits are capped. You can take a maximum of five weeks' rent where the annual rent is under £50,000, or six weeks' rent where it is £50,000 or more. To convert monthly rent to the cap, multiply the monthly figure by 12, divide by 52, then multiply by five. Taking more than the cap is unlawful and the excess must be repaid.
| Monthly rent | Maximum deposit (5 weeks) |
|---|---|
| £800 | £923 |
| £1,200 | £1,384 |
| £1,800 | £2,076 |
The 30-day rule and prescribed information
Two things must happen within 30 days of you receiving the deposit: the money must be protected in a scheme, and the tenant must be given the prescribed information and the scheme's terms. Both halves matter — protecting the money but failing to serve the prescribed information is still a breach. Keep dated proof of both, because if a dispute reaches court the burden is on you to show you complied on time.
What happens if you don't protect it
The penalties are deliberately severe. A tenant can take you to court and the judge must order you to pay them between one and three times the deposit, on top of returning the deposit itself. Just as damaging, you cannot serve a valid Section 21 notice while a deposit is unprotected — and under the Renters' Rights reforms, deposit protection is becoming a precondition for most Section 8 grounds too. In practice, an unprotected deposit can leave you unable to regain possession at all until you return the money.
- Compensation: 1–3× the deposit, awarded to the tenant.
- Possession blocked: no valid Section 21, and increasingly no Section 8.
- Repeat exposure: the penalty can apply per tenancy, including renewals where protection lapsed.
Ending the tenancy: deductions and disputes
At the end of the tenancy you can propose deductions for unpaid rent, damage beyond fair wear and tear, or cleaning to the check-in standard — but not for general wear or for pre-existing issues. Agree the figure with the tenant where you can; the deposit should be returned within 10 days of agreement. If you disagree, every scheme offers a free dispute resolution service, where an adjudicator decides based on the evidence. This is why a thorough, dated inventory with photographs at check-in and check-out is the single most valuable document a landlord can hold — disputes are won and lost on evidence, not assertion.
Common deposit mistakes to avoid
Most deposit penalties come from a handful of avoidable slips rather than deliberate non-compliance:
- Missing the 30-day window — protection and prescribed information must both be done in time; a late protection is still a breach.
- Forgetting renewals — when a fixed term rolls into a new tenancy, check the deposit is still correctly protected and the information re-served if needed.
- Serving incomplete prescribed information — leaving out the scheme leaflet or the prescribed-information certificate counts as a failure even if the money is protected.
- Taking too large a deposit — anything above the five or six-week cap is unlawful and must be repaid.
- No inventory — without dated check-in and check-out evidence, deductions are very hard to defend at adjudication.
Build these into a simple start-of-tenancy checklist and the risk all but disappears. If you would rather not manage it yourself, a good letting agent handles protection, prescribed information and disputes as a matter of routine.
Related guides
- Landlord legal requirements: the full compliance guide
- Tenant vetting checklist: how to reference tenants
- Section 21 abolition and existing tenancies
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