Updated Tuesday 15 Sept. 2026
different types of tenancy deposit schemes
different types of tenancy deposit schemes
Paying a deposit is a normal part of renting a home. What is less well known is that, in England & Wales, landlords have legal responsibilities about what happens to that money once they receive it.
How tenancy deposits actually work
Not every upfront payment from your landlord is the same. Here’s how the three common types compare.
How tenancy deposits actually work
Not every upfront payment from your landlord is the same. Here’s how the three common types compare.
Holding deposit
Upto 1 week’s rent
Refundable
Held by Landlord or letting agent
Usually rolled into your first month’s rent or security deposit.
Traditional cash deposit
5 – 6 weeks’ rent
5–6 weeks’ rent
Refundable, minus lawful deductions
Has to be held in a government-backed protection scheme
Your deposit should be protected in an approved tenancy deposit protection scheme.
Deposit replacement scheme
~1 week’s rent
1 week’s rent, Upfront cost (around 28% of monthly rent)
Monthly Installment for the duration of the tenancy
Held by third-party provider
This is a non-refundable insurance/service charge, not a traditional deposit.
Before you pay your deposit, remember the following
The Do's
Do check the legal cap
Do get proof of protection within 30 days
Do a meticulous check-in inventory
Always check the local market rates for rent
The Dont's
Do not pay via untraceable methods
Do not feel forced into a Deposit Replacement Scheme
Do a meticulous check-in inventory
Do not pay to simply "arrange a viewing"
Do not overpay the holding deposit limit
How tenancy deposits actually work
Not every upfront payment from your landlord is the same. Here’s how the three common types compare.
Holding deposit
Upto 1 week’s rent
Refundable
Held by Landlord or letting agent
Usually rolled into your first month’s rent or security deposit.
Traditional cash deposit
5 weeks’ rent
Refundable, minus lawful deductions
Has to be held in a government-backed protection scheme
Your deposit should be protected in an approved tenancy deposit protection scheme.
Deposit replacement scheme
~1 week’s rent
1 week’s rent, Upfront cost (around 28% of monthly rent)
Monthly Installment for the duration of the tenancy
Held by third-party provider
This is a non-refundable insurance/service charge, not a traditional deposit.
For holding deposit, there are Only 3 gov. approved schemes.
Paying a deposit is a normal part of renting a home. What is less well known is that, in England & Wales, landlords have legal responsibilities about what happens to that money once they receive it.
Before you pay anything, remember the following
The Do's
Do check the legal cap
Do get proof of protection within 30 days
Do a meticulous check-in inventory
Always check the local market rates for rent
The Dont's
Do not pay via untraceable methods
Do not feel forced into a Deposit Replacement Scheme
Do a meticulous check-in inventory
Do not pay to simply "arrange a viewing"
Do not overpay the holding deposit limit
FAQ
Is rent in advance the same as a tenancy deposit?
No. Rent paid in advance is payment for a period of rent, whereas a tenancy deposit is normally held as security against potential losses and is potentially refundable at the end of the tenancy. The legal treatment of the two is different.
Are deposit replacement schemes the same as a tenancy deposit?
No. A deposit replacement product generally involves the tenant paying a non-refundable fee or subscription instead of providing a traditional cash deposit. The protections and obligations can differ from those applying to a conventional tenancy deposit.
Can a landlord keep my tenancy deposit?
A landlord cannot simply keep a deposit because the tenancy has ended. Deductions should have a legitimate basis, such as qualifying damage, unpaid rent or other losses, and disputes can generally be challenged through the relevant deposit scheme's dispute-resolution process.
Can a landlord keep my tenancy deposit?
A landlord cannot simply keep a deposit because the tenancy has ended. Deductions should have a legitimate basis, such as qualifying damage, unpaid rent or other losses, and disputes can generally be challenged through the relevant deposit scheme's dispute-resolution process.
Are deposit replacement schemes refundable?
Usually, the fee paid to join a deposit replacement scheme is non-refundable. This is one of the key differences from a traditional tenancy deposit, which may be returned to the tenant at the end of the tenancy after legitimate deductions.
Can my landlord force me to use a deposit replacement scheme?
Generally, a landlord or letting agent should not require a tenant to use a particular deposit replacement product as the only option where the law requires a tenant to be offered a choice of paying a permitted tenancy deposit instead.
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All this deposit talk stressing you out? we can help out!
This guide summarises and simplifies information published by GOV.UK to make Rent Repayment Order rules easier to understand and apply to your own situation. It is not a replacement for the original guidance or legislation. For the full, original information, you can verify the guidance directly on GOV.UK. Tripl It is not a law firm and this content does not constitute legal advice. Laws and guidance can change, so always check the current official guidance before taking action.