Wallet marketing is a list of features. The only question that changes your risk is shorter: who holds the private key?
If they do
It is custodial. Convenient, recoverable, and an unsecured claim on a company. Appropriate for money you are actively using. Verify the operator first — the questions to ask.
If you do
It is self-custodial. Nothing can be reversed, nothing can be restored by a support agent, and you are the only thing standing between the balance and a mistake. Appropriate for money you intend to keep. The practices are in the security checklist.
The middle, and its real cost
A multi-signature or multi-device setup splits the authority so no single failure loses everything. It is meaningfully more secure, and meaningfully more complicated to set up and use. For most people a plain self-custodial wallet with a phrase stored properly is the better trade.
What to do when the two are mixed
Most people end up with both: custodial for the account they use daily, self-custodial for the part they are keeping. That is a reasonable position. What is not reasonable is not knowing which category any given holding is in — write it down, and the record habit in keeping records is where it belongs.
The one question to ask a product
When a service asks for a deposit, the answer it gives to "if I ask for my funds back, what happens" tells you the category. A clear answer means the question is one it has already thought about.