What Is a Custodian Bank?
A custodian bank is a financial institution that holds customers' securities for safekeeping to prevent them from being stolen or lost. The custodian may hold stocks, bonds, or other assets in electronic or physical form on behalf of its customers.
Often, a custodian bank does more than provide asset protection. It can manage customers' accounts and transactions, manage the settlement of financial transactions, account for the status of assets, and ensure compliance with tax regulations.