What is safekeeping charge?

A safekeeping charge refers to a fee that is charged by financial institutions or other authorized custodians for the safekeeping of securities or other valuables on behalf of their clients. This fee covers the costs associated with the secure storage and maintenance of the assets, including security, insurance, accounting, and administrative expenses.

Safekeeping charges are typically assessed as a percentage of the value of the assets being held and are charged on a regular basis, such as monthly or annually. The amount of the fee varies depending on the type of assets being held, the amount of assets, the duration of the safekeeping arrangement, and the specific terms of the custodial agreement.

Safekeeping charges are an important consideration for investors who hold securities or other valuable assets with financial institutions or other custodians. It is important to review the terms and conditions of a safekeeping agreement carefully, including the fees associated with the arrangement, to ensure that the costs are reasonable and competitive with other alternatives.