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  • FIRST POST
    • harshitguptaiitr
    • By harshitguptaiitr 10th Oct 17, 3:17 PM
    • 80Posts
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    harshitguptaiitr
    Rent and Deposit - Who earns the interest
    • #1
    • 10th Oct 17, 3:17 PM
    Rent and Deposit - Who earns the interest 10th Oct 17 at 3:17 PM
    If deposit is protected by TDS, and nothing is mentioned or discussed about the interest rate on the deposit money - who gets it and at what interest rate?

    Technically, it is the tenant's money - so they should get the interest earned but at what interest rate should the calculation be done?
Page 1
    • 00ec25
    • By 00ec25 10th Oct 17, 3:31 PM
    • 5,037 Posts
    • 4,381 Thanks
    00ec25
    • #2
    • 10th Oct 17, 3:31 PM
    • #2
    • 10th Oct 17, 3:31 PM
    If deposit is protected by TDS, and nothing is mentioned or discussed about the interest rate on the deposit money - who gets it and at what interest rate?

    Technically, it is the tenant's money - so they should get the interest earned but at what interest rate should the calculation be done?
    Originally posted by harshitguptaiitr
    insured or custodial scheme?

    if custodial then the scheme gets the interest which is why you don't get charged a fee

    if insured the LL gets to pay the insurance premium and (normally) gets to keep the interest as partial compensation for having had to pay more than that as a premium.

    What does your tenancy agreement say?
    Last edited by 00ec25; 10-10-2017 at 3:49 PM.
    • theartfullodger
    • By theartfullodger 10th Oct 17, 3:38 PM
    • 8,975 Posts
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    theartfullodger
    • #3
    • 10th Oct 17, 3:38 PM
    • #3
    • 10th Oct 17, 3:38 PM
    The tenancy agreement usually says who gets interest, if any.
    • Slithery
    • By Slithery 10th Oct 17, 4:49 PM
    • 257 Posts
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    Slithery
    • #4
    • 10th Oct 17, 4:49 PM
    • #4
    • 10th Oct 17, 4:49 PM
    If using TDS then 00ec25 is correct.
    https://www.tenancydepositscheme.com/news/blog/ask-tds-who-gets-the-interest-on-the-tenancy-deposit/

    Other schemes vary, for example on deposits in the DPS attracts a rate of Bank of England base rate minus 2.32%. The interest is paid in direct proportion to the amount of deposit repaid to landlord/tenant. For example if the full deposit is returned then tenant gets all of the interest.
    https://www.depositprotection.com/documents/newsletter-4.html
    Last edited by Slithery; 10-10-2017 at 4:52 PM.
    • Lysimache
    • By Lysimache 12th Oct 17, 1:47 PM
    • 53 Posts
    • 20 Thanks
    Lysimache
    • #5
    • 12th Oct 17, 1:47 PM
    • #5
    • 12th Oct 17, 1:47 PM
    'At the end of a tenancy period, when the deposit is reclaimed, it will be paid back to whoever is entitled to it - landlord or tenant - along with a portion of the interest generated. Under the current legislation, interest will be paid on all deposits at Bank of England base rate minus 2.32%. If the landlord and tenant are both entitled to a portion of the deposit, they will receive the relevant portion of the interest. The remainder of the interest is used to fund the scheme.'

    As the current base rate is 0.25%, does this mean no interest is due?
    • Comms69
    • By Comms69 12th Oct 17, 1:51 PM
    • 486 Posts
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    Comms69
    • #6
    • 12th Oct 17, 1:51 PM
    • #6
    • 12th Oct 17, 1:51 PM
    'At the end of a tenancy period, when the deposit is reclaimed, it will be paid back to whoever is entitled to it - landlord or tenant - along with a portion of the interest generated. Under the current legislation, interest will be paid on all deposits at Bank of England base rate minus 2.32%. If the landlord and tenant are both entitled to a portion of the deposit, they will receive the relevant portion of the interest. The remainder of the interest is used to fund the scheme.'

    As the current base rate is 0.25%, does this mean no interest is due?
    Originally posted by Lysimache


    Yes, and to be fair, at 0.25%, even the largest deposits aren't accruing anything
    • konark
    • By konark 12th Oct 17, 11:32 PM
    • 895 Posts
    • 696 Thanks
    konark
    • #7
    • 12th Oct 17, 11:32 PM
    • #7
    • 12th Oct 17, 11:32 PM
    ' Under the current legislation, interest will be paid on all deposits at Bank of England base rate minus 2.32%'


    So that's 0.25 - 2.32 = -2.07%, so you'll be owing them interest!
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