GLOSSARY TERM
Custody Fee
A custody fee is a fee charged for holding your investments in an account.
What does this mean in practice?
Some brokers charge it regularly even if you do not trade, while others do not charge it at all. It is essentially a fee for safekeeping your investments and maintaining the account where they are held.
Example
You hold ETFs in a brokerage account and the broker charges a yearly custody fee for keeping those assets in the account. The investments stay the same, but the fee still reduces your overall return.
Why it matters
It is another ongoing cost that can quietly reduce net return. When choosing a broker for long-term use, it is worth checking whether custody fees apply.
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