The Custodial wallet is the one you open by signing up on a website. In the custodial wallet, you may or may not have access to your private keys, a third-party server holds it securely. If the website blocks you or if the website in which you have your wallet is not accessible for some reasons, you might lose all the coins held in that account. The non-custodial wallet is the native crypto wallet application, in which you have full control over your private keys. No one can block you or will have access to your wallet unless or until you share the private keys of your wallet. During your crypto venture, you might need both types of wallets to handle exchange and securely store your coins. Use the custodial wallet for short-term holdings like exchanging, swapping, online purchases or fiat conversion. Hold all your coin savings in a non-custodial wallet.