What are the differences between Custody and Basic accounts? Who presents the best service?
Are any of you hesitant about these accounts? What are the pros and cons of both? Let’s find out!
The Custody Account combines the services of current account – correspondence – that of securities custody, administration and ancillary services. Are allowed then all operations related to the custody service such as collection of coupons, dividends and redemption of securities.
The Custody account, unlike the Basic account, has a higher degree of security, as it does not allow brokers to withdraw part of the securities in our portfolio and lend them to those who operate overdraft.
In the Basic account, we have a strong reduction of commissions regarding the purchase of shares, but also derivative products such as options and futures. However, the biggest difference is the possibility that our securities are lent to other investors to operate short, which would result in their loss.
And it is precisely to avoid unpleasant inconveniences that they can be lent up to a maximum of 30% of our portfolio. This option is very remote and only after numerous guarantees, it is possible to access this type of operation.
Unlike the Basic account, the Custody account is a custody and securities administration account which -as mentioned above- is the safest choice. All operations related to your wallet are allowed: making transactions, exchanging cryptocurrencies, paying for your purchases and it allows cryptocurrencies and banking services to coexist.
You can also transfer your securities to other intermediaries. This security, like all things, is not free and that cost is the higher commissions on buying and selling financial instruments. Also it will be impossible to operate on derivatives such as options or futures and therefore makes this profile less attractive to a certain audience of investors.
The main difference between the two, is therefore the degree of risk we want to take: investing only 50% will allow us to limit losses and protect at least our finances. Conversely, are we willing to tolerate a higher risk? The choice is yours!