"CUSTODY ACCOUNTS" in Foreign Banks?

Question

Is anyone familiar with Custody Accounts with Foreign Banks? I opened an account in a foreign country to trade securities directly on their exchange through their broker. But because I am a foreign investor they hold my deposit funds in a Custodial Account (not a money market account like in the USA). The purpose of the Custody Account is to give the Bank/Brokerage absolute legal control on what happens to my holdings. The Custody Account allows them to hold all funds and securities in it. MY QUESTION TO ANYONE WHO HAS EXPERIENCE: Will the Custody Account Interest Rate be combined with the (Security) Rate of Return? In other words, can i multiply the foreign interest rate by the rate of return (Security)?

Answer 1

Only your bank can answer that question. Email them.

You are probably familiar with the way it is done in the US. I've always used a brokerage and not a bank, but generally, the only way to earn interest in addition to what is traded through the account, is to buy a T-Bill. This is in a margin account. So if I'm trading futures and options, the only way the account can increase in value is through gains on my trading, unless I've purchased a T-Bill with the margin money.

But even in the US, lots of banks and brokerages do it differently. You have to ask them.