Custodian

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What is a 'Custodian'

A custodian is a financial institution that holds customers' securities for safekeeping so as to minimize the risk of their theft or loss. A custodian holds securities and other assets in electronic or physical form. Since they are responsible for the safety of assets and securities that may be worth hundreds of millions or even billions of dollars, custodians generally tend to be large and reputable firms.

BREAKING DOWN 'Custodian'

In addition to holding securities for safekeeping, most custodians also offer a variety of other services including account administration, transaction settlements, collection of dividends and interest payments, tax support and foreign exchange. The fees charged by custodians vary, depending on the services desired by the client. Many firms charge custody fees payable quarterly that are based on the aggregate value of the holdings.

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RELATED FAQS
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    Read about the difference between a normal custodian bank and a mutual fund custodian, why mutual funds use custodians and ... Read Answer >>
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    Examine why smaller custodian banks struggle to compete with larger custodian banks because of economies of scale and existing ... Read Answer >>
  3. Are custodians barred from engaging in commercial banking?

    Learn how bank custodians are allowed to engage in commercial banking as well as other investment activities according to ... Read Answer >>
  4. Will technology ever disrupt the role of the custodian bank?

    Learn why some consider new trading and account technology a disruptive threat to custodian banking and how banks are adapting ... Read Answer >>
  5. What is the difference between a custodian bank and a self-directed retirement account ...

    Learn about how an IRS-approved, self-directed retirement account custodian compares and contrasts with traditional custodian ... Read Answer >>
  6. Is it plausible to take from an IRA and invest in bonds for a more secure return ...

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