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A safekeeping receipt is a statement from a financial institution that confirms it is holding assets for safekeeping, and will maintain them separate from other assets and return them on demand. Safekeeping services are available from many financial institutions, usually for a fee, as they cannot use those assets in investment activities and thus have no way to generate a profit from them. The safekeeping receipt should be stored in a safe place as it provides a legal record of the deposit.
Assets in storage can include stocks, bonds, precious metals, and cash. In the safekeeping receipt, the financial institution indicates that it holds these assets on behalf of the owner, does not consider them part of its own assets, and cannot use them in financial activities. It also acknowledges a responsibility to return those assets on demand. With something like a safe deposit box where the institution does not know the contents, the safekeeping receipt may include a liability release; if something in the safe deposit box is damaged, the bank is not responsible because it could not control the contents.
This document creates a fiduciary duty on the part of the institution. It is responsible for taking reasonable steps to protect the assets in storage. These can include the use of security measures, unique identifying codes to prevent unauthorized access, and other steps recommended and practiced by the industry. If the institution fails to protect the assets, it can be held legally liable and may be sued for damages to replace the assets or compensate the owner for the lost value.
As long as assets are in safekeeping, the owner should keep the receipt. It is advisable to keep receipts that document deposits, assets in safekeeping, and similar financial activities in one location. If a owner dies, this will make it easier to locate all his assets and make sure they are counted as part of the estate. The safekeeping receipt can also be important in the event of a death, as the institution may want to see it, along with a death certificate, before it will release the assets.
If a financial institution does not automatically provide a safekeeping receipt, the customer can ask for one. It is also possible to request a duplicate or replacement copy. The institution may charge a fee for this. When banks sell or merge with others, all assets in safekeeping should transfer smoothly. Customers should receive a notice about the new ownership with new contact information.
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