TDS vs DPS vs mydeposits: which deposit scheme should you use?

You’re legally required to protect your tenant’s deposit — but the government gives you three authorised schemes to choose from, and no guidance on which to pick. TDS, DPS and mydeposits all do the same core job. The differences are in the detail: fees, flexibility, who holds the money, and how disputes are handled. Here’s a plain-English breakdown so you can make the right call for your portfolio.

Why the choice matters more than most landlords think

Let’s start with the stakes. Miss the 30-day protection deadline and you’re exposed to a penalty of between one and three times the deposit amount — awarded to the tenant, regardless of how well the tenancy goes. You must also serve the tenant with prescribed information within the same 30 days.

Under the Renters’ Rights Act 2025 — which converted existing assured shorthold tenancies in England to assured periodic tenancies from 1 May 2026 — deposit compliance also matters for possession. A court cannot make a possession order on most Section 8 grounds unless the deposit is held in an authorised scheme and you’ve complied with that scheme’s requirements (the anti-social behaviour grounds, 7A and 14, are the exception). The good news, unlike the old Section 21 regime, is that late protection can usually be cured: you can put things right before serving notice, right up to the point the court makes its order.

The deposit cap — five weeks’ rent where annual rent is under £50,000 — is unchanged. So on a £1,200 pcm property (£14,400 a year), you’re handling roughly £1,385. The scheme you choose determines who sits on that money during the tenancy.

Custodial vs insured: the fork in the road

Before comparing the three providers, decide on the protection type. Every scheme offers both.

Custodial means you hand the deposit to the scheme, which holds it in a ring-fenced account for the tenancy’s duration and handles repayment at the end. Cost: free. Drawback: you don’t have access to the funds.

Insured means you keep the deposit yourself and pay the scheme a per-deposit fee to insure it. Cost: typically £15–£30 depending on the scheme, the deposit size and whether you’re a member of a landlord body. Drawback: if a dispute arises and you can’t pay out, the scheme covers the tenant and recovers it from you.

For self-managing landlords with one or two properties, custodial is almost always the right answer — it’s free, lower-admin, and removes the temptation to dip into funds you may need to return. Agents and larger portfolio landlords often prefer insured because it keeps capital liquid.

The three schemes compared

Insured fees change regularly and vary by membership — always check the current rate on the scheme’s own website before you commit.

TDS (Tenancy Deposit Scheme)

Set up in 2003 by RICS and ARLA, TDS is the oldest of the three and operates as a not-for-profit. It’s the scheme most tightly integrated with the professional letting-agent sector.

• Custodial: Free
• Insured: Roughly £18.50 per deposit up to £500 and around £25.50 above £500 for non-members; cheaper for NRLA members
• Coverage: England and Wales (a separate entity, TDS Northern Ireland, operates in NI)
• Disputes: Aims to reach an adjudication decision within 28 days of receiving the evidence
• Standout: Strong professional-body backing and a well-regarded adjudication team

DPS (Deposit Protection Service)

Operated by Computershare, DPS is the largest scheme by volume (it holds well over a third of all protected deposits in England and Wales) and the one most self-managing landlords encounter first.

• Custodial: Free — and DPS built its name as a custodial scheme
• Insured: £18.75 per deposit up to £500 and £27.75 above £500 for landlords (agents pay less plus VAT). No membership or annual renewal fee — you pay per deposit only
• Coverage: England and Wales
• Standout: No membership fee on the insured side makes it genuinely pay-as-you-go

DPS is the straightforward, no-frills choice. Register, protect, get on with your life.

mydeposits

Part of the Hamilton Fraser group and the NRLA’s chosen scheme, mydeposits has a broader scope than either competitor.

• Custodial: Free
• Insured: Roughly £19–£27 per deposit depending on value for non-members; NRLA members get around a 30% discount (deposits over £500 drop to about £18 for members)
• Coverage: England and Wales, plus a dedicated Northern Ireland scheme; it also covers some lodger and student-let arrangements
• Standout: The widest coverage of the three, including Northern Ireland and certain non-standard lets

mydeposits is worth a look if you have a lodger arrangement, certain student lets, or a property in Northern Ireland.

How disputes actually work — and what wins them

Formal adjudication is rare. In the year to March 2025, just 1% of protected deposits — around 46,950 cases — went to formal adjudication, out of roughly 4.7 million deposits protected in England and Wales. When disputes do arise, the burden of proof falls on the landlord to justify any deduction.

Cleaning is the single biggest source of disputes, featuring in around 54% of cases. Adjudicators won’t take your word for it — they want an inventory signed at check-in, a check-out report, dated photographs, and invoices or receipts (quotes alone are weaker than paid invoices). Around 10% of landlords in disputes submit no evidence at all; those cases are ruled in the tenant’s favour by default.

The scheme you use does not affect your chances of winning a dispute. Your evidence does. Worth repeating: the choice between TDS, DPS and mydeposits will not help you recover £400 for a deep clean — a watertight check-out report will.

That’s why a thorough inventory and condition report at the start of every tenancy is as important as the deposit protection itself. The two are linked.

Can you use more than one scheme?

Yes. There’s no rule against using different schemes across your portfolio — DPS custodial for simple lets and mydeposits insured for the trickier ones, say. Others stick to one scheme for simplicity. If you use a letting agent, they’ll typically have a scheme they use for managed properties.

What about the Renters’ Rights Act?

The Act, in force from 1 May 2026, didn’t change the deposit protection framework — the 30-day rule, the penalty range and the deposit cap are all unchanged. What changed is the tenancy structure: fixed terms are gone and all tenancies now run as periodic. A deposit you protected at the start of a tenancy stays protected as it rolls on — you don’t re-register simply because the tenancy continues. But if you later agree a rent rise that lifts the cap and you top the deposit up, that additional amount needs its own protection within 30 days.

Which should you pick?

• Self-managing landlord, simple portfolio in England/Wales: DPS custodial. Free, easy, no decisions.
• Professional agent or larger landlord wanting to retain funds: TDS insured (for agent-sector integration) or DPS insured (no membership commitment).
• NRLA member: mydeposits insured — the member discount makes it competitive.
• Northern Ireland, lodgers or certain student lets: mydeposits is the natural fit.

One less thing to juggle

Whichever scheme you use, registration is straightforward — but it’s one more step in an already long move-in checklist. PropertyGoose handles deposit registration as part of tenancy setup, so you’re not bouncing between portals at 11pm on a tenancy start day. We also generate the prescribed information tenants must receive within 30 days — properly formatted, scheme-compliant, ready to serve.

If you’re weighing up what a full tenancy management service costs against doing it yourself, take a look at our pricing or book a quick call — we’re built by ex-letting agents who’ve made exactly the mistakes this article is trying to help you avoid.

Author: Craig Ryder