TheTaxHeaven Dictionary - Know the meaning of tax


What is a Custodian? 

<>Aspan custodian bank is a financial entity that safeguards customers' assets to prevent theft or loss. They also provide services like account management, transaction settlement, asset tracking, and tax regulation compliance. 

Custodian Details 

A custodian, typically a bank, is responsible for protecting tangible assets for clients. They are often used by investment firms to ensure the security of managed funds. They may also oversee the assets of a minor or incapacitated adult to ensure responsible management. 

Custodians differ from depositories. In 2020, the Securities and Exchange Board of India allowed non-banking custodians to manage gold exchange-traded funds and products. As such, various entities now offer custodial services for these assets. However, they must follow the Securities and Exchange Commission's custody rule when managing client funds. 

Clients pay fees for these custodial services, usually based on the investment amount and the specific services provided. These fees, often called "safekeeping fees," can cost clients several hundred dollars per year.