Legal Definitions - depository

A depository is an entity or a designated place responsible for the secure storage and safekeeping of assets, such as money, valuables, or financial securities. Its core function is to protect these assets and ensure they are available to the owner or authorized party upon request. While commonly referring to financial institutions like banks and credit unions that hold cash deposits, the term also applies to organizations that hold and manage investment instruments like stocks and bonds.

• Example 1: Personal Savings Account

  Imagine Maria receives her monthly salary and deposits a portion of it into her savings account at a local bank. The bank securely holds her money, allowing her to access it through withdrawals or electronic transfers whenever she needs it.

  This illustrates the bank acting as a depository for Maria's funds. It provides a secure place for her money, protecting it until she decides to use it.

• Example 2: Corporate Investment Portfolio

  A company called "Global Ventures Inc." invests a significant amount of its capital in various stocks and bonds. Instead of physically holding countless paper certificates, Global Ventures Inc. uses a large financial institution to electronically record and safeguard all its investment instruments.

  Here, the financial institution serves as a depository for Global Ventures Inc.'s securities. It ensures these financial assets are securely managed and accounted for, eliminating the need for the company to store physical documents.

• Example 3: University Endowment Funds

  A major university receives donations for its endowment fund, which are invested to generate income for scholarships and research. These invested funds are held by a specialized trust company, which manages their safekeeping and ensures they are properly accounted for.

  In this scenario, the trust company functions as a depository for the university's endowment assets. It is entrusted with the secure custody of these valuable investments, protecting them for the long-term benefit of the university.