The 3 Government-Backed Deposit Schemes in England Compared (DPS, TDS, mydeposits)

When you want the three government-backed deposit protection schemes compared in plain English, this guide does exactly that: it puts the Deposit Protection Service (DPS), the Tenancy Deposit Scheme (TDS) and mydeposits side by side so an England landlord can pick the right one with confidence. All three are authorised by the government, all three are legally watertight, and all three will keep you on the right side of the Housing Act 2004. What differs is the detail: how they hold the money, what they cost, how fast their dispute resolution moves, and how they fit the way you run your lettings.

The Renters’ Rights Act 2025, in force since 1 May 2026, abolished Section 21 and made every assured tenancy periodic, but it left deposit protection itself untouched. The duties under sections 213 to 215 of the Housing Act 2004 are exactly as they were. That makes choosing and using a scheme correctly more important than ever, because deposit failures now sit alongside an expanded enforcement regime that includes rent repayment orders and tougher financial penalties.

What “government-backed” actually means

There are only three deposit protection schemes authorised by the UK government to operate in England and Wales. Every penny of deposit you take for an assured tenancy must be protected in one of them within 30 days of receipt, and you must give the tenant the prescribed information about where it is held within the same window. There is no fourth option and no DIY alternative, holding a deposit in your own bank account, however carefully, is unlawful.

The three schemes are:

• The Deposit Protection Service (DPS), run by Computershare.
• The Tenancy Deposit Scheme (TDS), run by The Dispute Service.
• mydeposits, run by Total Property and backed by the National Residential Landlords Association.

Each scheme offers two ways of protecting a deposit: custodial (the scheme holds the cash) and insured (you keep the cash and pay a fee to insure it). The choice between those two models matters as much as the choice of provider, we cover it in depth in our guide to custodial vs insured deposit schemes. This article focuses on comparing the three providers themselves.

Before you compare schemes, make sure you have the basics right: the deposit must not exceed the legal cap (five weeks’ rent where annual rent is under £50,000), which we explain in how much a landlord can charge as a deposit, and you should understand the wider framework set out in our overview of tenancy deposit protection in England.

The three schemes at a glance

The headline comparison is simpler than landlords expect, because the legal protection is identical across all three. What you are really choosing between is service model, cost structure and the feel of the dispute process.

Costs and fee tiers change periodically, so always confirm the current figures on each scheme’s own website before you commit. The pattern, however, is durable: custodial protection is free across all three schemes, and the insured route always carries a fee because you are paying for the convenience of keeping the cash and the insurance that backs it.

Deposit Protection Service (DPS)

The DPS is the largest custodial scheme and is often the default choice for self-managing landlords who want zero hassle and zero cost. You pay the deposit into the DPS, it sits there for the tenancy, and at the end you and the tenant agree how it is split. There is no annual fee for the custodial product and the sign-up is light. The DPS also offers an insured product for landlords and agents who prefer to retain the funds.

The trade-off is that, like all custodial schemes, the DPS keeps any interest the money earns, you will not see it back. For most landlords that is a non-issue against the benefit of never touching the cash and never being accused of withholding it.

Tenancy Dispute Scheme (TDS)

TDS grew out of the dispute-resolution world and has a long-standing reputation for the quality and consistency of its adjudication. If you anticipate the occasional contested end-of-tenancy, for example because you let larger or higher-value properties, landlords often value the depth of TDS’s adjudicator decisions and its published guidance on what evidence persuades. TDS offers both custodial and insured products, with the insured route available on a per-deposit basis or through membership tiers aimed at agents and portfolio landlords.

mydeposits

mydeposits is closely integrated with the National Residential Landlords Association and is popular with members and with letting agents who manage deposits at scale. Its insured product is a natural fit if you already keep deposits in a client or business account and want the lightest-touch way to insure them. Like the others, mydeposits offers a free custodial option and free adjudication.

Custodial vs insured: the choice inside each scheme

Because all three providers offer both models, your first decision is often which model rather than which brand.

• Custodial. The scheme holds the money in trust. It costs nothing. You never have the cash on your books, so there is no temptation, no cash-flow confusion and no risk of being accused of misusing it. Repayment at the end is handled through the scheme. This is the safest default for most individual landlords.
• Insured. You keep the deposit in your own account and pay a fee to insure it. This suits landlords or agents who want the cash on hand or who manage many deposits and prefer one membership over many transactions. The catch: you must repay the deposit promptly at the end of the tenancy and, if there is a dispute, hand the disputed amount to the scheme to hold pending adjudication.

A quick decision aid:

A worked example: choosing and protecting a deposit

Priya lets a two-bedroom flat in Leeds at £1,100 a month. The annual rent is £13,200, comfortably under the £50,000 threshold, so the deposit cap is five weeks’ rent.

Step 1, calculate the cap. Weekly rent is £1,100 × 12 ÷ 52 = £253.85. Five weeks is £1,269.23. Priya takes a deposit of £1,250, safely under the cap.

Step 2, choose a scheme and model. Priya self-manages and does not want the money on her books, so she chooses a custodial scheme. She compares the three and picks the DPS for its no-cost simplicity, though TDS or mydeposits custodial would have served equally well.

Step 3, protect within 30 days. Priya receives the deposit on 3 July and pays it into the DPS on 9 July, well within the 30-day deadline.

Step 4, serve the prescribed information. By the same 30-day deadline she gives the tenant the prescribed information: the scheme name and contact details, the deposit amount, the property address, how to apply for the deposit back, what happens in a dispute, and the scheme’s leaflet. She keeps a dated copy.

Step 5, document the property’s condition. Priya prepares a detailed inventory with photographs and gets it signed at check-in. Without it, she would struggle to justify any deduction, see do you legally need an inventory to protect a tenancy deposit.

Step 6, at the end of the tenancy. Priya proposes returning £1,150 and deducting £100 for a damaged blind beyond fair wear and tear. She sets this out in a clear letter, our deposit return letter template covers the wording. The tenant disagrees, so the disputed £100 goes to the scheme’s free adjudication while the undisputed £1,150 is released promptly. The adjudicator reviews the inventory and check-out report and splits the difference. Total cost to Priya: nothing but a little time.

This is exactly the flow all three schemes are built to handle. The brand mattered far less than getting the process right.

Why getting protection right matters more in 2026

Deposit protection is not just good practice, it is enforced. If you fail to protect a deposit or to serve the prescribed information within 30 days:

• A court can order you to repay the deposit or pay it into a scheme, and to pay the tenant a penalty of between one and three times the deposit.
• You will generally be unable to rely on certain possession grounds until the deposit is returned or properly protected, complicating any future possession claim.
• The breach can feed into the broader enforcement landscape, local authorities have expanding powers, and unprotected deposits can be a red flag in wider compliance reviews. See our rundown of landlord fines in England 2026.

The Renters’ Rights Act did not change these deposit rules, but by removing Section 21 it removed the easy “no-fault” exit that some landlords previously leaned on. With possession now running through Section 8 grounds, the integrity of your paperwork, including deposit protection, is under sharper scrutiny than before.

How disputes work across the three schemes

Every authorised scheme provides free, impartial alternative dispute resolution (ADR) at the end of a tenancy. The mechanics are broadly the same whichever provider you use:

1. The landlord proposes deductions; the tenant agrees or disputes.
2. The undisputed portion is repaid.
3. The disputed amount is held by the scheme (always so in custodial; the insured landlord must hand it over).
4. Both sides submit evidence, inventory, check-in and check-out reports, photographs, receipts, correspondence.
5. An independent adjudicator decides, and the decision is final and binding.

The adjudicator starts from the position that the deposit is the tenant’s money and that the burden is on the landlord to justify every deduction with evidence. This is why your inventory and check-out report carry far more weight than the scheme you picked. Tenants can read the mirror-image of this process in how to dispute unfair deposit deductions.

A practical point: ADR is voluntary for both parties. If either side refuses to use it, the matter can only be resolved in the county court, slower, costlier and with no free adjudicator. Using the scheme’s ADR is almost always the smarter route.

Switching schemes or models

You can move a deposit between schemes or between custodial and insured during a tenancy, but you must do it carefully. The deposit must remain continuously protected and the prescribed information must be reissued to reflect the new arrangement. The cleanest moment to switch is at the start of a new tenancy. Mid-tenancy switching is possible but introduces avoidable risk if a deadline is missed, so if you do it, document every step and date.

Frequently asked questions

Are all three deposit schemes equally legal?

Yes. The DPS, TDS and mydeposits are the only three government-authorised schemes operating in England, and protecting a deposit in any of them satisfies your duty under the Housing Act 2004. The legal protection is identical; only the service, cost and dispute experience differ. That is why this comparison focuses on practicalities rather than legality.

Which deposit scheme is cheapest?

The custodial product is free in all three schemes, so cost is rarely a deciding factor if you go custodial. The insured products carry a fee, either per deposit or as an annual membership, and the cheapest option depends on how many deposits you hold. A single-property landlord usually finds per-deposit insured cheapest; a portfolio landlord or agent usually finds a membership tier better value. Always check current pricing on each scheme’s site.

Can I keep the deposit in my own bank account if I insure it?

Only under an insured scheme, and only if you protect it and serve the prescribed information within 30 days. You keep the cash, pay the insurance fee, and must hand any disputed amount to the scheme if there is a disagreement at the end. Keeping a deposit in your own account without an insured (or custodial) protection in place is unlawful and exposes you to the one-to-three-times penalty.

Do I earn interest on a custodial deposit?

No. Under all three custodial products the scheme retains any interest the deposit earns. If earning interest matters to you, an insured product lets you hold the cash yourself, but weigh that small gain against the fee and the extra responsibility of holding and repaying the money.

Did the Renters’ Rights Act 2025 change deposit protection?

No. The Act abolished Section 21, ended fixed terms and made all assured tenancies periodic, but it left the deposit protection regime under the Housing Act 2004 unchanged. The 30-day deadline, the prescribed information duty, the five-week cap and the one-to-three-times penalty all still apply exactly as before.

What happens to the deposit when a fixed term would once have ended?

Because all tenancies are now periodic and roll on indefinitely until ended properly, there is no “renewal” point that resets deposit protection. The deposit stays protected throughout. You do not need to re-protect it simply because time passes, only if you change scheme, change model, or the deposit amount changes.

Coming soon

Choosing a scheme is the easy part, the hard part is never missing a 30-day deadline, always serving the prescribed information on time, and keeping the inventory, return letters and prescribed information in one place when a dispute lands. Tenancy Pilot is launching soon with a compliance command centre that tracks every deposit deadline with automatic alerts, plus document generators for your deposit return letter, inventory and prescribed-information pack, so the paperwork that wins adjudications is ready before you need it. It is not live yet, but you can be first in line: join the waitlist.

This article is general information, not legal advice. Deposit rules and scheme details change, always verify the current position on GOV.UK and legislation.gov.uk, confirm fees directly with each scheme, and consult a qualified solicitor about your specific circumstances.