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What is Insured deposit scheme?
Last verified 31 October 2026
An insured deposit scheme is a type of tenancy deposit protection in which the landlord or letting agent keeps the deposit and pays the scheme to insure it. The alternative is a custodial scheme, where the scheme holds the money for free.
Why it matters to landlords
GOV.UK says all the approved schemes offer both options. The deposit must go into a scheme within 30 days of the landlord or agent getting it. The approved schemes listed for England and Wales are the Deposit Protection Service, MyDeposits and the Tenancy Deposit Scheme. Scotland and Northern Ireland have separate schemes.
With an insured scheme you handle the money, so you must be able to return it when the tenancy ends. If there is a dispute, the deposit stays protected until the issue is resolved, and if you use an insured scheme you or your agent must pay the disputed amount to the scheme, which holds it until then. That means you need the cash available, not spent. Holding deposits do not need protecting, but once someone becomes a tenant the holding deposit counts as a deposit and must be protected. Keep the certificate and the information you gave the tenant.
Example
Hari takes a deposit of £1,150 on 1 March 2027 for a flat in Gloucester and chooses an insured scheme because he wants to keep control of the money. He registers it on 8 March, well inside 30 days, and keeps the £1,150 in a separate account so it is there if the scheme asks for it.
Landlord Compliance Checklist 2026 (UK) →
Related terms
- Custodial deposit scheme
- Deposit protection
- Prescribed information
- Deposit dispute resolution
- Deposit cap