In this week’s #AskTDS blog, our Assistant Director of Business Development, Debbie Davies, answers a tenant’s question: “When I pay my tenancy deposit, who holds the money?”

When a tenant pays a tenancy deposit, there are some key documents that must be provided by the landlord or letting agent; the Prescribed Information and the scheme leaflet.

Landlords and letting agents that use TDS (Tenancy Deposit Scheme) have the option to register the tenancy deposit with either TDS Custodial or TDS Insured.  With both options, the full deposit value is protected.

If they choose the Custodial option, they will transfer the full tenancy deposit to TDS who will protect it until an agreement is made, at the end of the tenancy, as to the return of the deposit.

In the Insured scheme, the letting agent or landlord will hold the tenancy deposit, but protect it in TDS’ insurance-backed scheme.

Our partners at ARLA|Propertymark have a handy guide on the difference between the Insured and Custodial schemes.

Tenancy deposit protection was introduced in 2007 to protect the tenancy deposit. TDS also offers a free Alternative Dispute Resolution (ADR) service providing impartial adjudication should a deposit-related dispute arise at the end of the tenancy.

Find out more about how the ADR process works here.

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About the author

debbie davies icon

Debbie Davies joined TDS in July 2017 as the Assistant Director of Business Development.  She has an extensive background in the property industry with over 18 years’ experience in residential lettings.

Debbie brings her passion for raising standards in the lettings industry into her role and is responsible for the digital marketing, advertising, communications and events management for TDS with a firm focus on business development across the TDS brand including TDS England & Wales, TDS Northern Ireland, TDS Academy and TDS Charitable Foundation.

About TDS

Tenancy Deposit Scheme (TDS) is a Government-approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.

We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.

TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.

TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.

TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.

TDS Northern Ireland: TDS is Northern Ireland’s leading and only not for profit tenancy deposit protection scheme.

TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.

These views are those of the author alone and do not necessarily reflect the view of TDS, its officers and employees.

ARLA|Propertymark: For agents who would like to stay up to date, you can contact Propertymark | ARLA at: By being a member of Propertymark | ARLA you will be eligible for TDS Insured best headline rates.

RLA: If you are a landlord and would like to keep up to date with any changes that may affect you or your responsibilities, you can contact the RLA at: and quote reference: dg715 to receive 25% off your first year’s membership.

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