A custody account is an account that holds your financial assets, such as shares, bonds and funds, in a secure electronic format. When you buy shares through a broker, you don’t physically receive certificates. Instead, your investments are stored in a custody account under your name. This setup ensures your holdings are safe, organised and easy to track. The broker or custodian manages the account, keeps records of your transactions and updates your portfolio whenever you buy or sell.

Beginners often use custody accounts without realising it because most modern trading platforms automatically create one when you sign up. The custodian also handles important tasks like collecting dividends, processing stock splits and updating your balance. They make sure your assets are separated from the broker’s own funds, which reduces risk in case the broker faces financial trouble.

A custody account does not give the custodian the right to trade your assets unless you authorise it. You remain the owner, and the custodian simply safeguards the holdings. Some custodians charge small fees for maintenance or transactions, so it’s helpful to compare options before opening an account.

Overall, a custody account provides a safe and convenient way to hold investments. It helps beginners manage their portfolios with confidence, keep proper records and access their holdings whenever they need to review or adjust their strategy.