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What is Custodial deposit scheme?
Last verified 23 October 2026
A custodial deposit scheme is a type of tenancy deposit protection in which the scheme itself holds the tenant's deposit for the length of the tenancy. The alternative is an insured scheme, where the landlord or agent keeps the money and pays the scheme to insure it.
Why it matters to landlords
In England and Wales, a deposit must be protected in a government-backed scheme within 30 days of the landlord receiving it, and the tenant must be given the required information within the same period. The three schemes are the Deposit Protection Service, MyDeposits and the Tenancy Deposit Scheme. Using the custodial option costs the landlord nothing. When the tenancy ends, the deposit must be returned within 10 days of both sides agreeing how much the tenant gets back, and a disputed amount stays protected until the dispute is settled.
If a landlord fails to protect a deposit, a court can order it to be repaid or paid into a custodial scheme, and can order the landlord to pay the tenant extra compensation. Courts can also refuse possession. Scotland and Northern Ireland have their own schemes.
Example
A landlord takes a £1,200 deposit on 3 March, pays it into a custodial scheme on 10 March and sends the tenant the required information the same week. At the end of the tenancy both agree £1,100 goes back to the tenant and £100 to the landlord for a broken blind.