Tenancy deposit protection (TDP) legislation has been introduced by the States of Jersey to protect tenants’ deposits. We’ve received a few questions on how we, in turn, keep the deposit money safe whilst we’re holding it, and also what happens to the interest generated by the deposit.
Firstly, mydeposits had to undertake a detailed tender process, which placed a major emphasis on demonstrating our sound financial standing to the States of Jersey.
How we hold the deposit money
All deposits held by mydeposits Jersey are kept securely in UK bank accounts, which means each individual deposit is protected by the Financial Services Compensation Scheme (FSCS). In the extremely unlikely event that a bank used by the Scheme fails, the FSCS is on hand to cover the deposit money return. Regulated UK banks have been chosen to hold the deposit money instead of Jersey banks because the Jersey FSC guarantee only protects money deposited by individuals and not money deposited on their behalf by a third party.
What about the interest on the deposits lodged?
The interest generated on the deposit is used to administer the scheme and pay for running costs. This is because mydeposits must be self-financing and not rely on States of Jersey funding.
Under the Regulations there are four ways in which the interest earned on tenancy deposits MAY be used by my|deposits Jersey.
- to meet the costs of administering the scheme;
- to provide to tenants interest on their deposits accruing while those deposits are held by mydeposits;
- to reimburse the Minister’s costs in administering these Regulations; and
- otherwise in accordance with directions of the Minister.
Currently due to interest rates being at a historical low of 0.5%, the States of Jersey have agreed we can use all the interest earned to fund the administrative costs of running of the scheme. We have also been given permission from the States of Jersey to charge a fee, taken from the tenants’ deposit, which is also set out in the Regulations.
The Minister will keep both the use of interest earned and the fee under regular review. If interest rates rise steeply then changes may be made to the use of interest and administration fee.
If you have any more questions about the scheme or the legislation, check out our FAQ section and look out for latest blogs which will look at the schemes processes over the coming weeks.
Alternatively you can email us at firstname.lastname@example.org and we’ll get back to you as soon as possible.