Limited Purpose Trust Company

DEFINITION of 'Limited Purpose Trust Company'

A trust company that has been chartered by the state to perform specific trust functions. These functions can include acting as a depositor or safekeeper for securities or mortgages. The Participants Trust Company is an example of a mortgage depositor trust.

BREAKING DOWN 'Limited Purpose Trust Company'

The Depository Trust Company (DTC) in New York is another example of a limited purpose trust company. This trust holds securities in safekeeping for banks and investment firms. This allows them to make book-entry settlements on their trades.

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RELATED FAQS
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    I have inherited a trust fund. This is the first time I have considered pulling money from the account.  ... Read Answer >>
  2. Will I have to pay taxes every year when I receive the $25,000 from my trust fund?

    My inheritance is in the form of a trust fund that distributes $25,000 per year for 10 years. ... Read Answer >>
  3. If I place money in a trust, is it taxable?

  4. Is there a time limit on collecting on the trust fund?

  5. What is the difference between revocable and irrevocable intervivos trusts?

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