Bank Custody Accounts?

Question

Does anyone understand bank Custody accounts used in foreign banks- to hold equities and financial instruments- on behalf of USA investors? Are the Return Rates on the instruments held in the Custody Account subject to the Interest rate of that account? In other words would you be able to multiply your rate of return (Whichever security) x Interest Rate (Custody AccounT)? Thanks

Answer 1

No, a custody account is just a way of safekeeping the financial instruments. Custodian bank should pass on to the account owner all of the income from the securities. Customer's rate of return should be the rate of return of the securities (less the bank's custody fee).