Do You Get Interest on Your Tenancy Deposit in Scotland?

Understanding how tenancy deposits are handled is a key concern for renters in Scotland, especially when it comes to questions about interest. If you're renting in Scotland, here's what you need to know about tenancy deposit interest, how the law protects your money, and what to expect when your tenancy ends.

How Tenancy Deposits Work in Scotland

Since 2012, all landlords in Scotland who take a deposit must use a government-approved tenancy deposit scheme. These schemes keep your deposit safe and help resolve disputes fairly. The rules are set out by the Tenancy Deposit Schemes (Scotland) Regulations 2011 and supported by the Housing (Scotland) Act 2006^1,2.

Your deposit is protected for the duration of your tenancy and cannot be used by the landlord except in accordance with the law (for example, if there are damages or unpaid rent at the end of your tenancy).

Is Interest Paid on Tenancy Deposits in Scotland?

By law, landlords in Scotland are not required to pay interest to tenants for holding a tenancy deposit. Instead, the law requires that all deposits must be lodged with an approved scheme, and the schemes themselves do not pay interest to tenants when the deposit is returned. This applies to:

• Private residential tenancies
• Assured tenancies
• Short assured tenancies

This rule was designed to ensure fairness and security for both parties, rather than to generate income from interest for either the landlord or the renter.

How Your Deposit Is Protected

Your landlord must register your tenancy and pay the deposit into a government-approved scheme within 30 working days of the tenancy start date. The three approved schemes in Scotland are:

• SafeDeposits Scotland
• mydeposits Scotland
• Letting Protection Service Scotland (LPS Scotland)

These schemes hold your deposit securely and help resolve any disputes that may arise at the end of your tenancy. If you’re unsure whether your deposit has been protected, you can check directly with these schemes or by asking your landlord for the scheme details.

Official Forms: Raising a Dispute or Complaint

If you believe your landlord has not protected your deposit, or you want to challenge deductions, you can take the following steps:

• Dispute Application (via Scheme): Each of the approved schemes allows you to raise a dispute online. For example, with SafeDeposits Scotland, you can use their Raise a Dispute form. This is used if you and your landlord disagree over how much deposit should be returned.
• Application to the First-tier Tribunal for Scotland (Housing and Property Chamber): If your landlord failed to protect your deposit, you can make an application using the Application Form for Tenancy Deposit Regulation Breach. For example, if your deposit was not registered within the correct timeframe.

The First-tier Tribunal for Scotland (Housing and Property Chamber) handles residential tenancy disputes, including issues around deposit protection and deductions.

Related Legislation and Your Rights

• Housing (Scotland) Act 2006 – covers deposit protection and general private renting rules.
• Tenancy Deposit Schemes (Scotland) Regulations 2011 – details on scheme operation and landlord requirements.
• Private Housing (Tenancies) (Scotland) Act 2016 – governs modern private residential tenancies.

These pieces of legislation ensure your deposit is secure, but do not entitle you to interest on your deposit. They do give you a clear process to follow if problems arise.

Action Steps If You Have a Deposit Issue

• Contact your deposit scheme provider to try to resolve the issue.
• Use the scheme’s dispute resolution process if you disagree with deductions.
• If the deposit was not protected, submit an application to the First-tier Tribunal for Scotland (Housing and Property Chamber) using the official form.

It’s a good idea to keep copies of all correspondence and rental documents.

Frequently Asked Questions: Tenancy Deposit Interest in Scotland

1. Do I get interest on my deposit when my tenancy ends?
   No. Currently, Scottish law does not require that landlords or deposit schemes pay interest to tenants when returning a deposit at the end of a tenancy.
2. What should I do if my landlord hasn’t protected my deposit?
   You can apply to the First-tier Tribunal for Scotland (Housing and Property Chamber) for compensation by completing the official application form.
3. Which tenancies are covered by deposit protection rules in Scotland?
   All private tenancies, including private residential, assured, and short assured tenancies, must have deposits protected in an approved scheme.
4. How do I check if my deposit is protected?
   Contact your tenancy deposit scheme provider (such as SafeDeposits Scotland) or ask your landlord for proof of protection and scheme details.
5. Where can I get help if there’s a dispute over the deposit?
   Use your deposit scheme's dispute resolution, or contact the First-tier Tribunal for Scotland if the deposit was not protected or you cannot resolve the issue.

Summary: What Scottish Renters Need to Know

• Scottish law does not grant interest to tenants on their deposits.
• Your deposit must be protected in an approved scheme for security and fair dispute resolution.
• If you face issues, official schemes and the First-tier Tribunal for Scotland provide clear paths to resolve them.

While you can’t earn interest on your deposit, you do benefit from some of the UK's strictest rules around deposit protection and fair treatment.

Need Help? Resources for Renters in Scotland

• First-tier Tribunal for Scotland (Housing and Property Chamber) – handle deposit and tenancy disputes
• mygov.scot Tenancy Deposits Guide – government advice and how to check deposit protection
• Citizens Advice Scotland: Tenancy Deposits – step-by-step advice for tenants
• Contact your specific deposit scheme support (SafeDeposits Scotland, mydeposits Scotland, or LPS Scotland)

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1. Housing (Scotland) Act 2006
2. Tenancy Deposit Schemes (Scotland) Regulations 2011
3. Private Housing (Tenancies) (Scotland) Act 2016

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