The aim of a bond scheme is to help people in renting a house where they cannot get a deposit together. It provides assistance to people who cannot afford a cash deposit, as landlords are instead offered a bond by the local council replacing the traditional cash deposit.
The majority of these schemes work by providing a guarantee to your prospective landlord.
You don't have to raise any money and no money actually changes hands unless there is a problem at the end of your tenancy. If there is and it's decided you landlord is entitled to compensation, you will normally have to pay back any money it has to pay out though the bond.
Different bond schemes have different rules. There may be a limit on how big a deposit they can help with. Some are aimed at certain groups of people (such as young people, eldery or people on benefits).
Some schemes may only use landlords who have properties available and are regsistered with that council.
As we said, the Bond is an agreement with the council, but at the start of the tenancy you and your landlord must sign up to the conditions of the bond agreement with the council. This agreement explains when and what a claim can be made for if you (as the tenant) break the tenancy agreement and difficulties arise.
A bond is not a transfer of cash, but a written guarantee issued by the scheme on behalf of you, the tenant.
Although it is quite unusual, some schemes may actually offer loans for a deposit. Usually, they lend you the money in advance and you pay it back over a period of time from your wages or benefits.
If you can't get a bond from your local council read this other article about raising the deposit yourself through a cheap repayment loan scheme.