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Since the introduction of the Tenancy Deposit Scheme (TDS) on the 6th April 2007 it has been a legal requirement for a landlord to hold a tenants deposit in one of the government approved schemes or to obtain the correct tenancy deposit insurance.

There are a number of tenancy deposit schemes and below is a review of the cost of the tenancy deposit fees and charges from the various schemes.

Comparison of various tenancy deposit scheme fees and charges

There are a small number of insurance backed tenancy deposit schemes available for landlords to use. These have the advantage of allowing a landlord to keep hold of the deposit. The insurance cost covers a landlord and tenant for the expenses of administrating the scheme and also for the insurer recovering any disputed amount of the deposit. The charges and fee scales can be complicated by the fact that there are often varying pricing structures in each scheme depending on whether a landlord is a member of an affiliated organisation and how much and how many tenancy deposits they wish to protect.

Insurance Backed Tenancy Deposit Schemes

1. DepositGuard

Set up fees – There are none but you have to join the RLA which costs. Apparently, the Deposit Guard product is exclusive and only available to members of the RLA. The scheme is actually administered by the Tenancy Deposit Scheme (TDS).

Members of the RLA can then protect deposits for the following costs:

Deposit up to £500 = £13.20

Deposit over £500 = £17.95

The features of the scheme are:

Free and instant online registration
Full RLA Landlord Advice Team support
Email reminders when your tenancy is ending
Pay online with a credit/debit card
Free access to ADR (Alternative dispute resolution)

2. My Deposits

My deposits is a partnership between the National Landlord Association (NLA) and Hamilton Fraser an insurance business. Because it’s association with the landlord association there are discounted rates available to members of the NLA.

Initial one off joining fee for landlords £20 or £5 for NLA members and London Rental Standard LRS accredited landlords

Deposit up to £500 = £19.12 NLA & LRS = £13.20
Deposit over £500 = £26 NLA & LRS = £17.95

3. The Tenancy Deposit Scheme (TDS)

The Tenancy Deposit Scheme is the longest serving deposit protection scheme and was originally set up in 2003 and is operated by the Dispute Service Ltd.  It is a not for profit scheme.

There is no initial joining fee

Deposit up to £500 = £17.50
Deposit over £500 = £24

Custodial Tenancy Deposit Schemes

The custodial schemes are FREE to use.

To have a look at the respective merits of the insurance versus the custodial schemes
The original custodial tenancy deposit scheme (TDS) is administered by the Deposit Protection Service. It is joined in April 2016 by a new scheme provided by My Deposits. To register your interest in My Deposits Custodial Scheme.


Anyone can use these schemes, and most reputable letting agents should absorp / embed these costs into their fees as part of the bundle.

We do not charge our landlords for deposit bonding, nor we believe, should any other agent, especially those using insurance backed schemes as the only reason for using insurance backed schemes is so the agent can retain the deposit in their client account this earning (meagre) interest – assuming of course they are managing the client account appropriately.

We still hear of agents “running off with the deposits” and when the company goes belly up, both landlord and tenant are left wondering the heck to do.

Custodial DPS every time.

I personally use the Custodial Deposit Protection Scheme as I do not see any point whatsoever using insurance backed schemes that actually cost money.

The only possible benefit would be where the interest gained on the client account justified the annual cost, but, with interest rates at the lowest they have been for decades, it makes no sense to bother with anything but custodial. Bind it – forget it – done.

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