Custodian

AAA

DEFINITION of 'Custodian'

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. IRA Asset Will

    A document that specifies how the assets in an individual retirement ...
  2. Series 28

    An exam given by the Financial Industry Regulatory Authority ...
  3. Custodial Account

    1. An account created at a bank, brokerage firm or mutual fund ...
  4. Safekeeping

    The storage of assets or other items of value in a protected ...
  5. Broker

    1. An individual or firm that charges a fee or commission for ...
  6. Treasury Receipt

    A zero-coupon bond that doesn't pay interest at regular intervals ...
RELATED FAQS
  1. What kinds of expenses are included in the expense ratio?

    Investors who utilize mutual funds or exchange-traded funds (ETFs) in their investment strategies must take into consideration ... Read Full Answer >>
  2. I want to roll over a portion of my retirement plan with my employer and I have been ...

    This is based on the rules that an individual can roll over a portion of his or her retirement plan balance, rather than ... Read Full Answer >>
  3. How does a depository bank benefit from issuing an ADR for a foreign company for ...

    For domestic investors the benefits of increasing the portion of their portfolio that they invest in foreign companies is ... Read Full Answer >>
  4. I need special accommodations when taking the Series 63 exam. How are such arrangements ...

    The Series 63 exam is administered by the North American Securities Administrators Association (NASAA) to test financial ... Read Full Answer >>
  5. Do I need a class to take the Series 63 exam?

    There are no specific educational prerequisites for the Series 63 exam or the Series 7 exam candidates must pass before sitting ... Read Full Answer >>
  6. What are the major differences between investment banking and private equity?

    Private equity and investment banking both raise capital for investing purposes but tend to do so in very different ways. ... Read Full Answer >>
Related Articles
  1. Taxes

    After-Tax Balance Rules For Retirement Accounts

    Accumulating post-tax assets can work to your advantage. Find out how.
  2. Personal Finance

    4 Dishonest Broker Tactics And How To Avoid Them

    Protecting yourself from unscrupulous practices means knowing how to spot them.
  3. Investing

    Fee-Based Brokerage: Will They Work For You?

    Learn the pros and cons of this type of investing and whether it will work for you.
  4. Taxes

    Designating A Minor As An IRA Beneficiary

    Leaving liquid assets like cash or securities to minors can be a complicated procedure. Make sure you understand how your gift will be distributed, managed and taxed.
  5. Options & Futures

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  6. Professionals

    How Advisors Can Help Clients Spot Elder Scams

    Financial crimes against the elderly are on the upswing. Here's what financial advisors can do to help protect their most vulnerable clients.
  7. Professionals

    Tips for Retiring Without Long Term Care Insurance

    Long term care insurance is as pricey as it is important. Here are tips for how to manage retirement and meet healthcare costs without a policy.
  8. Professionals

    Tips for Breaking the Ice with New Clients

    Tips and methods to ensure a successful start to client/advisor relationships.
  9. Professionals

    Advisors Should Consider a 'Dementia Protocol'

    Diminishing mental capacity can strike any aging client, that's why advisors should push clients and their families to incorporate a 'dementia protocol.'
  10. Professionals

    5 Vital Questions Advisors Should Ask New Clients

    By asking the right questions, listening and building trust, investors and their financial advisors can get the most out of their relationship.

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center