Which deposit scheme is best for a small landlord?

Is there a best deposit scheme for a small landlord?

No scheme is officially ranked above the others. GOV.UK lists three schemes for a property in England or Wales, and you can use any of them (GOV.UK):

• the Deposit Protection Service (DPS)
• mydeposits
• the Tenancy Deposit Scheme (TDS)

Each meets the duty in section 213 of the Housing Act 2004. The three wrote a joint guide to give “a transparent and consistent approach to resolving deposit disputes, regardless of which scheme protects the deposit or whether custodial or insured protection is used” (joint guide).

So the choice comes down to how you want the deposit held, what it costs, and how each scheme works day to day. Whichever you pick, the deposit must be protected and the prescribed information given within 30 days. Since 1 May 2026, that also matters for possession, under section 215.

Custodial or insured: which matters more?

For most small landlords, this is the bigger choice. Every scheme offers both (GOV.UK).

• Custodial: you pay the deposit to the scheme, which holds it free of charge. At the end, it repays the money as you and your tenant agree, or as an adjudicator or court decides.
• Insured: you or your agent keep the deposit and pay the scheme a fee to insure it. At the end, you repay your tenant yourself.

With an insured deposit, the money has to stay available. If there’s a dispute, the scheme can direct you to pay the amount in dispute to it within 10 days of its direction (Housing Act 2004, Schedule 10, paragraph 6). The joint guide says the dispute can go ahead even if you don’t pay it in, and you’re then expected to follow the adjudicator’s decision (joint guide).

TDS’s own guide sets out the factors it sees: cost, control, simplicity, experience and the number of properties (TDS). It says smaller landlords “might prefer custodial schemes for their simplicity and zero cost”, and that larger portfolios may suit insured protection for cash flow.

What does each scheme charge?

Custodial protection is free at all three. TDS lists Custodial as free (TDS), DPS says Custodial is free to use (DPS), and mydeposits says there’s no fee for its Custodial scheme (mydeposits).

Insured fees for a private landlord, as each scheme listed them on 19 October 2026:

• TDS Insured: £19.94 for a deposit of £499.99 or less, £27.14 for £500 or more, including VAT, per deposit (TDS). TDS describes this as pay as you go, for the life of the tenancy agreement, with lower rates for NRLA members (TDS).
• DPS Insured: £18.75 for a deposit under £500, £27.75 for £500 or more, per deposit, with no registration or yearly renewal fee (DPS).
• mydeposits insured: a yearly membership based on the number of deposit allocations you need, at most £22.00 per allocation a year, including VAT, with extra discounts for NRLA members (mydeposits).

The units differ. TDS and DPS charge once per deposit, while mydeposits charges by the year. Fees change, so check the scheme’s own page on the day you protect.

The dispute services are free for assured periodic tenancies. DPS may charge £500 plus VAT, or 10% of the deposit if greater, for a dispute on a tenancy that isn’t an assured periodic tenancy or occupation contract (DPS custodial terms).

How do the schemes differ if there’s a dispute?

In the timetable, more than the approach. All three decide on written evidence, and the deposit stays the tenant’s money until you prove each deduction (joint guide). The steps differ:

• Evidence deadline: 5 working days at TDS, 14 calendar days at DPS, and 5 working days at mydeposits for a custodial deposit, or 10 working days for an insured one.
• Who sees what: at TDS, you submit first and your tenant sees your evidence before responding. At DPS and mydeposits, both sides send evidence in the same window.
• Insured disputes: DPS Insured evidence goes by email or post (DPS insured terms), and mydeposits runs insured cases on its Total Property portal (mydeposits).

The full side-by-side comparison is in the guide TDS vs DPS vs mydeposits.

How do I choose a deposit scheme?

Work through it in this order:

1. Decide who holds the money. Custodial costs nothing and the scheme handles repayment. Insured keeps the money with you, for a fee.
2. If insured, price your own deposits. Compare each scheme’s fee for your deposit size, and how long you expect to hold it.
3. Check you could pay a disputed amount in within 10 days of the scheme’s direction.
4. Read how each scheme runs a dispute, especially the evidence deadline.
5. Look at the account itself: the online portal, bulk tools if you let several homes, and any membership discount you already have.
6. Check the scheme takes your kind of letting. TDS Custodial only accepts deposits for assured periodic tenancies in England or Wales (TDS Custodial Scheme Rules, rule 3.1).

Can I change scheme later?

Yes, during the tenancy, as long as the deposit stays protected throughout. TDS’s rules say a deposit can’t be moved out until 30 days after it was registered with TDS Custodial (rule 7.2). TDS doesn’t allow a deposit to move from a custodial scheme into TDS Insured (rule 7.6). After any move, give your tenant up-to-date prescribed information within 30 days (rule 7.10).

Where next?

For TDS’s two types side by side, see What’s the difference between TDS Custodial and TDS Insured?, and for the 30-day rule, How long do I have to protect a deposit? Each scheme’s dispute guide is linked from TDS vs DPS vs mydeposits, and the deadline calculator works out any of the six evidence deadlines. A deposit dispute pack is laid out in the order your chosen scheme expects.