Are different schemes available?
There are currently three schemes available in England and Wales. These are:
- Deposit Protection Service
- Tenancy Deposit Scheme (TDP)
Each of these offers two options. You can opt for a custodial scheme, which holds your deposit for free, or you can choose an insured scheme. The latter means that you or the agent hold the deposit yourself and you insure it by way of payment to the scheme.
The amount you’ll pay for an insured scheme depends on the total cost of the deposit.
There’s also a new Zero Deposit Scheme available. This is gaining popularity because it offers the same level of protection for landlords as a traditional deposit (six weeks’ worth of rent), but saves tenants thousands of pounds. The only catch is that tenants have to pay for the guarantee with a week’s rent, which is non-refundable.
* Note that there are separate TDP schemes in Scotland and Northern Ireland.