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Custodial account

Campeon
Contributor

Custodial account

One of the reasons I set up Paypal account was to avoid the big commercial banks everyone knows. However, when opening my account I was surprised to see Wells Fargo will hold my money in a "Custodial Account". Does this mean is it just for direct deposits that Wells Fargo will hold my money? Or does it mean any money that hits my Paypal account will be held by Wells Fargo? I am new to this, so any clarification will be appreciated. I will close my acccount if Wells Fargo gets a hold of my money. I am not planning to do direct deposit, but I am curious to see how the system works.
4 REPLIES 4
Snow-Cat
Advisor

Re: Custodial account

This is only thing I can dig up concerning Wells Fargo and PayPal:

If you have a Wells Fargo card linked to your PayPal Account and make a payment with that card your transaction is monitored by Wells Fargo risk and fraud detection systems.   Wells Fargo card purchases also are protected by Zero Liability, which means customers are not responsible for promptly reporting unauthorized transactions. 

 

As far as a "Custodial Account" - that's a different animal.   A custodial account is a savings account accessible through a financial institution, mutual fund company or brokerage firm that an adult controls for a minor under the age of 18, depending on state laws. It can also be a retirement account handled for eligible employees by a custodian. In a custodial account, approval from the custodian is mandatory for a minor to transact securities.

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Campeon
Contributor

Re: Custodial account

Thanks for the reply. My problem is that when I opened the new Paypal account, Paypal was the one who assigned a Wells Fargo account for direct deposit (custodial account) meaning Wells Fargo will hold my money. I dont know if it is just for direct deposits which I am not intending to do or is it for any money I put into Paypal account? If that amkes sense.
Snow-Cat
Advisor

Re: Custodial account

I have no clue, I have both a personal and business and nothing like that happened.   Things can change and do from time to time but, have not heard about this.  Maybe some one else has some insight.  To be clear, this happened when you opened a Personal Account.   Normally, when one opens a regular PayPal Account, they link and confirm a bank account and credit card and their account is verified and good to go.   There's no direct deposit setup in the process.   If you have one of the other PayPal products like the Prepaid Debit Mastercard, you can setup a direct deposit for your pay check, etc.

So I seem to be missing something here - sorry.   Perhaps customer service has an explanation.

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Campeon
Contributor

Re: Custodial account

If you go to settings on our account, then go to direct deposits, it says account # and routing # anf down the bottom it says "money will be held in a custodial account at Wells Fargo" . I am hoping someone knows about this. Thanks again.