Investing · Jurisdiction DE

Brokerage account

A custody account holds securities. It is not a current account and not a deposit. The holding belongs to the customer, and the firm keeps the record.

In more detail

The Banking Act describes custody business as safekeeping and administration of securities for others. In collective custody you become a co-owner of the pool of that class, not the owner of one certificate in a vault. Buying, selling and safekeeping are different steps. BaFin explains custody business. Finmon opens no account.

Background

A fall in price remains a fall in price. Safekeeping does not protect against the market. It is also not the same as deposit insurance on a current or savings account. What happens when the firm cannot return the securities is the question of investor compensation, a different module. Finmon names no provider.

An example

You buy a fund unit. The money leaves the cash account, and the unit appears in the custody account. The unit can fall in value even though the custody account is kept correctly. Two risks: safekeeping and the market. Finmon sees neither balance.

A common misconception

What sits in the custody account is as safe as money in the current account.

The units can fall in price. Safekeeping does not answer what the security is worth.

Source: BaFin · Merkblatt Depotgeschäft. Last reviewed: 2026-10-29. Editorially reviewed on 2026-10-29. Next review 2027-10-29. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.