It could also be up to the employee, not the custodian, to determine what income taxes are due on the distribution and whether tax penalties would apply. The depositary may also not be responsible for withholding any portion of the distribution that would be used to cover income tax due. If the account holder were to die, the custodian could be responsible for the liquidation of the account funds and then be responsible for distributing the assets to the beneficiaries according to the parameters of the deceased`s estate. Most custodian banks offer related services such as account management, transaction processing, dividend and interest payment collection, tax support and foreign exchange management. The fees charged by custodian banks vary depending on the services the customer needs. Many companies charge a quarterly custody fee based on the total value of the assets. In addition, registered investment advisory firms that manage assets on behalf of clients typically use a custodian bank to hold clients` assets – they are not the custodians themselves. For example, an independent investment firm uses Charles Schwab as a custodian of its clients` assets. The company manages the investments but has no «custody» or possession of a client`s money.

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