Tips for Using Safekeeping Receipts for Investments
Safekeeping is where an asset owner opts to place the asset in the custody of an agent; usually a lending institution or a bank. The lender will issue a safekeeping receipt to acknowledge the care of that asset.
Safekeeping receipts are a financial instrument that investors can use for asset management. Here are the top tips for entrepreneurs.
Types of Valuables to Place in a Private Vault
A business can place different types of valuables in a custodian account. The items may include documentation for the firm, such as a deed, contract, or architectural blueprints. You can also store other assets such as antique jewelry or precious metals.
Some entrepreneurs may choose safekeeping for their bond securities or stock investment. The custodian or depository will issue a certificate. A safekeeping receipt or certificate will include the quantity and the number of commodities in the storage.
Custodian Versus Depository
When it comes to safekeeping, an entrepreneur ought to understand the different types of services. A custodian will primarily safeguard your valuables and assets. A custodian limits their work to providing a vault and typically does not offer other services.
A depository offers a private vault for holding your valuables and provides additional services. Many depositories can assume control, responsibility, or liability on behalf of their clients. They can also facilitate the transfer of assets through debit/credit cards or a savings account.
Asset and Risk Management
Investors can use a safekeeping receipt as a financial instrument in several different ways. If you have bonds and securities, placing them with a custodian reduces the risk of keeping them on your premises. A private vault prevents losses due to fire, theft, or late deliveries during a transaction.
Since a depository offers additional services, it can facilitate the transfer of assets. If you need to sell the precious metal in the private vault, you don’t have to transfer it physically. The safekeeping service provider will handle all the transactions for you.
Use Depositories Future Contracts
A safekeeping receipt can also facilitate contractual agreements and transactions. The account holder of the items in the private vault may transfer the valuables when the other party fulfills their terms.
An entrepreneur can choose to use the receipt to facilitate deliveries or use it in future contracts. The benefit of using a depository is that it can provide additional services to allow for a safe transfer.
Why Records are Essential
When using a private vault, the entrepreneur needs to pay attention to documentation. You may want to request periodic statements of the safekeeping accounts from the provider. Timely reports can help you determine if the depository is using your assets for security lending without your approval. Like with all other investments, due diligence will help reduce fraud and theft.
A safekeeping receipt can be a viable financial instrument for an investor. Using a depository instead of a custodian account can make it convenient for completing transactions. Make a point of doing the due diligence of the credentials and background of your provider.
If you are looking for safekeeping services Global Trust Depository (GTD) can help you with the same. We take a comprehensive approach in everything we do and are committed to service. Visit or call us today to learn more about safekeeping, bonded courier services, asset management services, private vault storage, and paymaster services.
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