Safekeeping is when an individual places an asset that they own, for example, property titles, bonds, shares, precious metals, fur, collectible art, and more, in the care of an agent, usually a financial institution or bank. The agent then gives acknowledgment of receipt of the asset to the owner who may then choose to send this acknowledgment to a third party for a fee.
There are a number of ways in which you can use a safekeeping receipt, seeing as it is an alternative financial tool for those who may need one. The reason why the institutions providing safekeeping receipts charge a fee is because they cannot use the assets in their care to generate a profit. They simply hold the asset for an individual and give it back on demand. If they fail to protect the asset, they can be sued as they are held legally liable.
Easy Location of Assets
The owner of an asset must keep the receipt safely, making sure it does not fall into the wrong hands. If they die, it will also be easier for their assets to be located. In order to collect the asset from the institution, they may need to see both the receipt and the death certificate. This is why when necessary, one may get a duplicate copy of the safekeeping receipt for which they may need to pay an extra fee.
What to Look for
Because you don’t have to actually give up ownership of your asset in any way with an SKR, it is a good alternative financial tool to consider. To make sure that you are getting the most advantage out of getting a safekeeping receipt, find an institution that:
- Offers arrangements in at least two different currencies relevant to you.
- Has a low percentage rate for SKR banking fees
- Signs agreements in a short time after it is completed
- Utilizes their program with small banks which may have less stringent rules to abide by and lower transaction fees
- Does not need to perform personal or corporate credit checks
- Designs a safekeeping receipt specifically for each new client
- Utilizes six months to finish the banking fees for full payment after being issued
It is important to do your due diligence and understand the terms of the financial institution that you settle for well. If you need the help of a professional to make your decision, do not hesitate to seek one out as this can be the difference between getting great service or bad service that does not suit your needs.