TDS Custodial holds tenancy deposits on behalf of tenants during a tenancy. At the end of the tenancy, the deposit is returned either by agreement of the landlord and tenant, by a decision of the Courts or via an adjudication we have undertaken.
The deposits which TDS Custodial holds are invested by us in bank deposit accounts as permitted by the Government. We invest monies for longer terms whilst ensuring we always have sufficient cash to repay deposits when a tenancy ends.
TDS Custodial uses the interest it receives to fund its operations on a not-for-profit basis. Considering the recent short-term increase in interest rates, some deposit interest is now being provided to tenants.
Paying interest to tenants on deposits
From 1 September 2023, if we hold your Custodial deposit, interest will become payable to you, meaning that at the end of your tenancy you could receive more than just your deposit back.
How the scheme works
On or after the 1st September 2023 we will calculate the interest payable on a daily basis on each deposit held. [The interest payable will be calculated from 1 September 2023 onwards for deposits held before this date].
We will pay the interest back to the tenant[s] when the deposit is released (i.e. after all parties have agreed the deductions, or an adjudication or court decision has been agreed). The interest will be paid with the deposit payments to the tenants. If there is no deposit repayment to the tenant then the tenant will receive just the interest [as long as this is in excess of £1].
The interest on the deposit to be paid will be set by TDS Custodial each month and the rate will be published and updated each month on this website page.
If the deposit held with TDS Custodial was originally with another tenancy deposit scheme provider and they have transferred interest to us, this will be included in the deposit interest we pay.
Any deposit interest will be split equally between the tenants on a deposit or in the same proportion that any deposit payments have been returned to the tenants.
The deposit interest is not part of the deposit and will not be returned to the landlord or letting agent.
Any deposit interest payment less than £1 for an individual tenant will be donated to a TDS nominated charity in view of the charges involved in refunding small amounts of money.
If you require a tax certificate in relation to the interest paid you can request this at custodial.finance@tenancydepositscheme.com. It is the Tenant's own responsibility to meet their tax obligations with HMRC directly and we are not liable for Tenants individual tax obligations.
TDS Custodial Interest Rate
TDS Custodial determines the interest rate it will use each month and will publish the rates it will apply to the deposit here. This monthly TDS Custodial interest rate will fluctuate (up or down) or may not be payable.
From 1st June 2019 landlords in England are limited to the equivalent of 5 weeks' rent for new and renewed tenancies (or 6 weeks if the annual rent is £50,000 or more).
Get the deposit cap right with our handy calculator.
Note that where the calculation results in more than .5 of a penny above the cap, we have rounded down to the nearest penny
