Deposit Protection Schemes Compared: DPS vs TDS vs MyDeposits
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All three schemes (DPS, TDS, MyDeposits) are government-approved and equally valid. DPS only offers custodial (free). TDS and MyDeposits offer both custodial (free) and insured (£20-30/year). Choose based on whether you want to hold the deposit yourself.
Overview of deposit protection in England
Since 2007, landlords must protect tenant deposits within 30 days using a government-approved scheme. Three schemes operate in England and Wales, all offering free custodial protection.
Deposit protection serves two purposes: ensuring tenants get their money back fairly and providing free dispute resolution when landlords and tenants disagree about deductions.
Custodial vs insured schemes
There are two types of protection:
- Custodial (free): You transfer the deposit to the scheme. They hold it until tenancy ends. No ongoing fees.
- Insured (fee-based): You keep the deposit. You pay an annual fee (typically £20-30) for insurance that guarantees the tenant can claim if you default.
Both types provide identical legal protection. The choice depends on whether you want cash flow flexibility (insured) or zero costs (custodial).
All schemes are equally valid
The government approves all three schemes equally. Courts and tribunals treat them identically. There is no "better" scheme legally - only different features that may suit your situation.
DPS (Deposit Protection Service)
DPS is the only scheme that operates custodial-only. It's completely free with no insured option. Run by Computershare, it's the largest scheme by deposit volume.
Key features
- Custodial only - no insured option
- Completely free for landlords and agents
- Deposit paid into DPS within 30 days
- Online registration and management
- Free dispute resolution (ADR)
- Mobile app for landlords and tenants
Pros
- 100% free - no hidden costs
- Simple and straightforward
- Largest scheme with most experience
- User-friendly online portal
- Quick dispute resolution (average 28 days)
Cons
- No insured option if you want to hold deposit yourself
- Must wait for both parties to agree before release
- Phone support can have long wait times
Best for
Landlords who want simplicity and zero costs. If you don't need access to the deposit money during the tenancy, DPS is the obvious choice.
Website: depositprotection.com
TDS (Tenancy Deposit Scheme)
TDS offers both custodial (free) and insured (fee-based) options. It's popular with letting agents and offers additional landlord services.
Key features
- Custodial option: completely free
- Insured option: fee varies by deposit amount
- TDS Academy training for landlords
- Integration with property management software
- Free dispute resolution (ADR)
- Tenant referencing service available
Insured fees (TDS)
| Deposit Amount | Annual Fee |
|---|---|
| Up to £500 | £18.00 |
| £500.01 - £1,000 | £24.00 |
| £1,000.01 - £2,000 | £32.00 |
| Over £2,000 | £40.00 |
Pros
- Choice of custodial or insured
- Good educational resources
- Strong agent integration
- Responsive customer service
- Additional landlord services available
Cons
- Insured fees higher than MyDeposits
- Portal less intuitive than DPS
- Dispute resolution can take longer (up to 42 days)
Best for
Landlords using letting agents, or those who want additional services like training and referencing alongside deposit protection.
Website: tenancydepositscheme.com
MyDeposits
MyDeposits offers both custodial (free) and insured options with competitive pricing. It's the only scheme backed by the National Landlords Association (NRLA).
Key features
- Custodial option: completely free
- Insured option: flat fee structure
- Backed by NRLA (National Residential Landlords Association)
- Discounts for NRLA members
- Free dispute resolution (ADR)
- Deposit replacement option (Zero Deposit)
Insured fees (MyDeposits)
| Deposit Amount | Annual Fee | NRLA Member |
|---|---|---|
| Up to £500 | £16.80 | £13.44 |
| £500.01 - £1,000 | £22.80 | £18.24 |
| £1,000.01 - £2,000 | £28.80 | £23.04 |
| Over £2,000 | £34.80 | £27.84 |
Pros
- Lowest insured fees (especially for NRLA members)
- Zero Deposit alternative option
- Strong landlord advocacy through NRLA
- Quick online registration
- Good mobile experience
Cons
- Smaller market share than DPS/TDS
- Fewer agent integrations
- Best pricing requires NRLA membership
Best for
Landlords who want insured protection at the lowest cost, particularly NRLA members. Also good if you're interested in deposit replacement alternatives.
Website: mydeposits.co.uk
Comparison table: DPS vs TDS vs MyDeposits
All three schemes provide identical legal protection. The differences are in service options, fees for insured protection, and additional features.
| Feature | DPS | TDS | MyDeposits |
|---|---|---|---|
| Custodial (free) | Yes | Yes | Yes |
| Insured option | No | Yes | Yes |
| Typical insured fee | N/A | £24-40/year | £17-35/year |
| Free ADR | Yes | Yes | Yes |
| Average dispute time | 28 days | 42 days | 28 days |
| Mobile app | Yes | Yes | Yes |
| Agent integrations | Good | Excellent | Limited |
| Training resources | Basic | TDS Academy | Via NRLA |
| Deposit replacement | No | No | Yes (Zero Deposit) |
Which scheme should you choose?
For most landlords, DPS custodial is the best choice - it's free and simple. Choose insured only if you specifically need to retain the deposit money.
Choose DPS if:
- You want zero costs
- You don't need access to the deposit during tenancy
- You prefer the simplest option
- You self-manage (not using an agent)
Choose TDS if:
- You use a letting agent (best integrations)
- You want insured protection with good support
- You value training and educational resources
- You want tenant referencing from same provider
Choose MyDeposits if:
- You want the cheapest insured protection
- You're an NRLA member (20% discount)
- You're interested in deposit replacement alternatives
- You want landlord advocacy through NRLA
Our recommendation
Start with DPS custodial. It's free, widely used, and reliable. Only consider insured protection if you have a specific cash flow need. The annual fees add up across multiple properties with no meaningful benefit for most landlords.
How to switch schemes
You can switch schemes between tenancies but not during one. The existing deposit must be returned to the tenant, then a new deposit taken and protected with the new scheme.
Steps to switch
- Wait until current tenancy ends
- Process deposit return through current scheme
- Take new deposit from new tenant (or same tenant if renewing)
- Register new deposit with chosen new scheme
- Serve new prescribed information within 30 days
Can you switch mid-tenancy?
Technically possible but not recommended. You'd need to:
- Request deposit return from current scheme
- Pay it back to tenant
- Collect new deposit from tenant
- Protect with new scheme
- Serve new prescribed information
This creates complexity and potential compliance risks. Wait for tenancy end unless there's a compelling reason.
Switching from insured to custodial
If you currently use insured protection but want to switch to free custodial, the process is the same. At tenancy end, transfer to a custodial scheme instead of renewing your insured protection.
Frequently asked questions
Which scheme has the best dispute resolution?
All three provide free, independent adjudication. DPS and MyDeposits average 28 days; TDS averages 42 days. The process and standards are similar - outcomes depend on your evidence, not which scheme you use.
Do I need to use the same scheme as my agent?
If your agent handles deposit protection, you'll use their chosen scheme. If you self-manage or handle deposits separately, you choose. Check your agency agreement to confirm responsibilities.
Can I use different schemes for different properties?
Yes. Many landlords use DPS for some properties and insured protection for others. There's no requirement to use one scheme exclusively.
What happens if a scheme goes bust?
All schemes are government-approved with financial oversight. Custodial deposits are ring-fenced and protected. Insured schemes have backup insurance. Scheme failure is extremely unlikely, and deposits would be protected either way.
Is there a Wales-specific scheme?
No. DPS, TDS, and MyDeposits all operate in England and Wales. Rent Smart Wales registration is a separate requirement but doesn't affect deposit scheme choice.
What about Scotland and Northern Ireland?
Scotland uses SafeDeposits Scotland, Letting Protection Service Scotland, and MyDeposits Scotland. Northern Ireland uses a different system. This comparison covers England and Wales only.
Managing this yourself?
LandlordOS helps UK landlords stay compliant and organised:
- Automatic compliance reminders for Gas Safety, EICR, EPC
- Document storage with AI-powered certificate reading
- Tenancy tracking and rent management
LandlordOS tip
For most self-managing landlords, DPS custodial is the obvious choice. It's free, simple, and reliable. The money sits safely with the scheme, earning no interest but costing nothing. Insured protection only makes sense if you need that cash flow - and with deposit caps at 5 weeks' rent, the amount is rarely worth the annual fee.