I think Wesminster's original post confused us regarding the definition of a tenancy deposit, which is not in s.213(8).
The actual definition is in s.212(8):
IMHO it may difficult to argue that a cheque is not "money intended to be held as security" since that's the whole point of taking the cheque and since once the landlord has the cheque there's nothing the tenant can do against the money ending on the landlord's bank account. Money is held 'otherwise'.“money” means money in the form of cash or otherwise;
"tenancy deposit”, in relation to a shorthold tenancy, means any money intended to be held (by the landlord or otherwise) as security for—
(a) the performance of any obligations of the tenant, or
(b) the discharge of any liability of his,
arising under or in connection with the tenancy.