Which tenancy deposit protection scheme should I use?
How do you decide which deposit protection scheme is best for your needs?
There are three government-approved tenancy deposit protection schemes available, all of which offer both Custodial and Insured options:
mydeposits – this is our partner scheme, which was the first to be approved by the Government in 2007
Tenancy Deposit Scheme
Deposit Protection Service
Each scheme provider operates and charges in a slightly different way, so it’s just a case of deciding which one is right for you.
mydeposits, which currently protects more than 1.1 million deposits, is partnered with the NRLA and is also the only scheme operating throughout the UK and Channel Islands.
And because it is part of the HFIS group, many landlords find it’s convenient to have both their deposit protection and landlord insurance under the same roof.
Visit the mydeposits website to find out more and compare their Insured and Custodial products.
You or your agent keep the tenant’s deposit and pay a small fee to a TDP scheme to insure the deposit.
As with a Custodial scheme, you must protect the deposit and issue prescribed information to the tenant within 30 days of receiving the deposit.
The benefit to you is that you can earn interest on the money and if there are deductions to be made at the end of the tenancy and the tenant agrees, you have immediate access to the money. You can also make sure the balance is returned to the tenant quickly.
You or your agent pay the deposit to a TDP scheme and they hold the funds for the duration of the tenancy.
As with an Insured scheme, you must protect the deposit and issue prescribed information to the tenant within 30 days of receiving the deposit.
The benefit of this type of scheme is that there is no protection fee.
However, it does mean there will be a small delay (generally up to 10 days) in your tenant getting their deposit back at the end of the tenancy and in you receiving any agreed deduction to pay for damage or rent owed.
It can also take some time for the deposit to be released if the tenant has left owing money and cannot be contacted.
Custodial
Insured
Replacement
