Tenancy deposit schemes compared: DPS, TDS and mydeposits
Three authorised schemes, two protection styles, one 30-day deadline. Here is a quick comparison for landlords choosing where to put the deposit.
For assured shorthold tenancies in England, a deposit must be protected in one of three authorised schemes within 30 days of receipt. Each scheme offers a custodial and an insurance-backed option. All meet the same legal test — the choice is practical, not legal.
The three schemes at a glance
| Scheme | Custodial | Insurance |
|---|---|---|
| Deposit Protection Service (DPS) | Yes — free | Yes — fee per deposit |
| Tenancy Deposit Scheme (TDS) | Yes — free | Yes — fee per deposit |
| mydeposits | Yes — free | Yes — fee per deposit |
Custodial vs insurance-backed
- Custodial. The scheme holds the money. Free. Simpler at the end of the tenancy because the scheme releases the money directly.
- Insurance-backed. The landlord keeps the money and pays a fee. Useful for landlords who want to hold funds in a specific account or earn any interest, and for agents managing multiple deposits.
How landlords tend to choose
- Single property, one-off tenancy — custodial (DPS or TDS custodial) is often the simplest.
- Portfolio landlord — insurance-backed can be cheaper in aggregate and lets money sit where it earns.
- Using a letting agent for one property — align with the agent's scheme to avoid administrative friction.
Whichever you pick, the 30 days still runs
Protection with any of the three schemes counts as compliant, but only if it happens within 30 days of the money arriving. See the sister guide on prescribed information for tenancy deposits for the second half of the duty.
Track the arrival date, the scheme, and the prescribed information served date against the property on the deposit diary page.
Frequently asked questions
- Which is the best tenancy deposit scheme?
- All three authorised schemes — DPS, TDS and mydeposits — meet the same legal requirements. The right choice usually depends on whether you prefer custodial (scheme holds the money, free) or insurance-backed (you hold it, small fee), and each scheme's dispute process.
- Is a custodial scheme free?
- Custodial protection is typically free to the landlord — the scheme holds the money and pays any interest to itself to fund the service. Insurance-backed protection has a per-deposit fee, but lets the landlord earn any interest and use the money's location strategically.
- Can I use different schemes for different tenancies?
- Yes. There is no requirement to standardise on one scheme across a portfolio. It is common to use custodial for straightforward tenancies and insurance-backed for others, or to align with a letting agent's own scheme.
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