Safe Deposit Boxes: What You Should and Shouldn’t Store in One
A safe deposit box is a lockable container, typically constructed of metal, used to keep valuables at a bank or credit union. These boxes are frequently stored in vaults and can be hired by bank customers for a fee.
Passports, medical directives, original copies of wills and powers of attorney, and other documents that you may require at any time should be kept in a secure location at home, such as a fireproof home safe fastened to the floor or wall.
The Key Takeaways
- Safe deposit boxes are built to survive natural disasters including fires, floods, storms, and tornadoes.
- A safe deposit box should never be used to hold only one copy of an important document.
- Safe deposit boxes are extremely handy for persons who are uncomfortable storing items digitally.
It is advisable to have a co-lessor for a safe deposit box.
Benefits of Using a Safe Deposit Box
The box can’t be opened without your key! Furthermore, they are tamper- and fireproof, ensuring that your valuables are protected even if the environment in which they are stored changes. It’s worth noting that they aren’t always flood-proof, so put the contents in a waterproof bag before storing them.
Risks of Using a Safe Deposit Box
Unlike bank accounts, the contents are not insured. Safes are only accessible during the bank’s office hours. Fires, floods, and other disasters can still cause content loss.
Alternatives to Safe Deposit Boxes
A Safe Deposit Box isn’t the only way to protect your assets. Consider the following options:
What Is a Safe Deposit Box?
A safe deposit box, commonly referred to as a safety deposit box, is a separately guarded container that is typically housed within a bigger safe or bank vault. Safe Deposit Boxes are commonly found in banks, post offices, and other institutions.
How Safe Deposit Boxes Work
A safe deposit box is a secure container, typically a metal box, that is kept in a financial institution’s vault. Account customers can rent these boxes, which are intended to store valuables and vital papers. To provide security, the box contains a dual lock system that requires two keys to unlock it.
Let’s look at a scenario. You inherited some unique coins from your grandfather and don’t feel comfortable storing them at your apartment. You are in the market for a safe deposit box! The first place to check is with your bank or credit union. Safe Deposit Boxes are housed in a safe vault and are typically limited in quantity. If there are any available, you can hire them for a year.
A Safe Deposit Box requires two keys to open: your key and one maintained by the institution. Keep your key in a secure location because you have the only copy. You can visit your box any time during normal business hours, and the institution will require you to produce evidence of identification before you can access your possessions.
Only you, the owner of the Safe Deposit Box, will know what’s inside. We shall specify below which goods are and are not safe to store in your box. Although your savings in an institution are insured, we do not recommend storing cash in a Safe Deposit Box because it is not federally insured.
Safe deposit boxes are ideal for storing valuable documents including contracts and company paperwork, military discharge papers, and tangible stock and bond certificates, as well as tiny collectibles and family heirlooms. Keep in mind that the largest safe deposit boxes are typically only 10 inches by 10 inches and two feet deep. Important goods to store in your safe deposit box include:
- Personal papers include original birth certificates, adoption paperwork, marriage licenses, and citizenship papers.
- Wills and powers of attorney should be copied, but not exclusively.
- Military records and discharge papers (DD 214s).
- School transcripts and diplomas.
- Sensitive documents that you do not want roommates, children, relatives, or visitors to discover.
- The deed to your house and any car titles.
- If you have any paper stock or bond certificates (including US savings bonds) (most are now issued online).
- An inventory of your home’s contents in case you need to file a claim under your homeowner’s insurance policy.
- Important business documents and records.
- Important contracts.
- Hard drives and flash drives contain backups and critical information.
- Jewelry, collectibles (such as coin or stamp collections), and family heirlooms are all valued financially and/or emotionally.
- Other documents or little items that are difficult or impossible to replace.
https://www.youtube.com/watch?v=PhsiVEm6ag8
Advantages and Disadvantages of a Safe Deposit Box
In one word: security. Safe Deposit Boxes are “proofed” by requiring only two keys to unlock them: one held by the financial institution and one held alone by the box owner. The box can’t be opened without your key! Furthermore, they are tamper- and fireproof, ensuring that your valuables are protected even if the environment in which they are stored changes. It’s worth noting that they aren’t always flood-proof, so put the contents in a waterproof bag before storing them.
Safe deposit boxes are unquestionably more secure than most people’s residences. Bank vaults, of course, are more difficult to break into and are housed in secure locations with alarms, video cameras, and high-quality locks. They are also designed to survive fires, floods, storms, tornadoes, and other natural catastrophes.
Although safe deposit boxes are meant to resist natural disasters, it’s a good idea to put anything that may be damaged by water in a waterproof container, such as a zippered plastic bag, to add another layer of protection.
It is better to keep valuables in a safe deposit box that will not be needed in an emergency. Passports, medical directives, original copies of wills, and powers of attorney, among other documents, should be kept in a secure location, such as a fireproof home safe. You should avoid storing the following goods in your safe deposit box:
- Passports
- Only copies of living wills, advanced medical directives, and durable powers of attorney
- Valuables you have not insured
- Cash
- Anything illegal
It is also not advisable to keep cash or comparable investments in a safe deposit box. Since these will not earn interest, you will lose money due to the bank’s leasing fees. To make the most of your money, you should check into the finest high-yield savings accounts.
A safe deposit box’s contents are not insured in the same way that bank or credit union deposits are. The Federal Deposit Insurance Corporation (FDIC) insures cash deposits up to a specific amount, but because there is no way to check the contents of a safe deposit box, banks will not insure them. Furthermore, if heirs are not informed of the drawer’s location, the box is deemed abandoned and its contents are auctioned off by the state’s unclaimed property agencies.
Pro
- Provides safe storage for crucial documents and other valuables.
- Guards, cameras, and alarm systems, which may not be available at home, provide greater security.
Con
- Unlike bank accounts, the contents are not insured.
- Safes are only accessible during the bank’s office hours.
- Contents may still be lost due to fire, flood, or other disasters.
Special Considerations
Banks have been offering safe deposit boxes for about 150 years, and other types of safekeeping have been available for much longer. However, fewer people now hire safe deposit boxes, preferring digital storage and home safes.
This may make it easier to identify an available box—or more difficult if your bank no longer provides them. Betty Riess, a Bank of America spokeswoman, stated that demand for boxes has decreased “significantly,” particularly among younger clients who are more prone to rely on digital storage. According to Riess, less than half of her company’s safe deposit boxes are rented.
Some banks now provide the boxes for free, depending on the type of account and balance.
Safe Deposit Box Costs
The cost of renting a safe deposit box varies by organization. HFS charges between $30 and $75 a year, depending on the size of the box. The sizes range from 5″x5″x24″ up to 10″x10″x24″. The cost is reasonable given the importance of the objects frequently housed there and the peace of mind that its protection affords.
Alternatives to Safe Deposit Boxes
A safe deposit box isn’t the only way to protect your assets. Consider the following options:
1. Install a fire-, water- and burglar-proof home safe.
Safes that mount securely and cannot be readily removed from the home can be purchased for under $200. Even more expensive safes are less expensive than renting a safe deposit box for decades.
2. Ramp up home security
Installing new locks, a home security system and video cameras could help to prevent theft.
3. Protect your home from fire and flood
Preparing your home for natural disasters not only saves your valuables but may also lower your homeowners’ insurance costs.
4. Store documents online
Keep original estate planning documentation in your attorney’s office. You can also scan, digitize, and encrypt documents before uploading them to a secure cloud storage service or a thumb drive maintained in a safe location. Although digital copies cannot be used in place of originals, they will make it easier to replace the originals.
How to Get and Use a Safe Deposit Box
Financial organizations frequently provide consumers with free or cheap safe deposit boxes. If your bank’s local branch does not have safe deposit boxes available, contact another location or inquire with other financial institutions in your area.
Rental prices vary based on box size, bank, location, and state laws. Depending on the size of the box, you can expect to spend anywhere from $20 to $200 per year. For pricing information, contact your local financial institutions.
Here’s how to get a safe deposit box:
- Decide what you want to store: This determines the package size you’ll need.
- Decide who can access the box: Multiple persons (such as spouses) can rent the same safe deposit box. Co-renters can access the box even when no other co-renters are around. Choose trustworthy co-renters; banks are not responsible if a co-renter takes stuff from the box without your permission.
- Make an appointment with the bank: Financial organizations are required by federal law to verify your identity, which normally includes your name, address, birth date, Social Security number, and photo ID. Inquire about the documentation that will be required.
- Open the account and sign the agreement: Safe deposit box rental agreements typically last one year and are renewed annually. Your bank may bill you or deduct the rental fee from your account automatically. Maintain up-to-date contact information to avoid missing payment notifications.
- Get your key and put your items in the safe deposit box: Make a list of everything inside the box. Photograph the things. Keep the list, images, and safe deposit box keys safely stored at home.
What Can You Store
Safe deposit boxes can be used to store a variety of items. They are ideal for storing difficult-to-replace documents such as contracts, financial and commercial paperwork, military discharge papers, physical stock and bond certificates, jewelry, coins, and photographs. Everything stored here should be items that you do not require regular or instant access to.
Powers of attorneys, living wills, advanced medical directives, and other critical documents should be maintained in a secure location at home, such as a fireproof safe fastened to the floor. You’ll want to have access to these anytime you need them, not just during your financial institution’s work hours.
What You Can’t or Shouldn’t Store
Safe deposit boxes can be used to store a variety of items. They are ideal for storing difficult-to-replace documents such as contracts, financial and commercial paperwork, military discharge papers, physical stock and bond certificates, jewelry, coins, and photographs. Everything stored here should be items that you do not require regular or instant access to.
Powers of attorneys, living wills, advanced medical directives, and other critical documents should be maintained in a secure location at home, such as a fireproof safe fastened to the floor. You’ll want to have access to these anytime you need them, not just during your financial institution’s work hours.
| Yes! Store in a Safe Deposit Box | No! Don’t Store in a Safe Deposit Box |
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How Much Does a Safe Deposit Box Cost?
Can a Bank Open Your Safe Deposit Box?
What Should You Not Keep in a Safe Deposit Box?
While safe deposit boxes are a fantastic place to store sentimental valuables and essential documents, they should not be used for anything irreplaceable or urgently needed. Living wills, advance medical directives, and durable powers of attorney are not appropriate for a safe deposit box if they are the sole copies. Cash is also a bad option because you can earn interest by keeping it in a savings account.
Why is a Safe Deposit Box cool?
In one word: security. Safe Deposit Boxes are “proofed” by requiring only two keys to unlock them: one held by the financial institution and one held alone by the box owner. The box can’t be opened without your key! Furthermore, they are tamper- and fireproof, ensuring that your valuables are protected even if the environment in which they are stored changes. It’s worth noting that they aren’t always flood-proof, so put the contents in a waterproof bag before storing them.
What doesn’t a Safe Deposit Box do?
Safe Deposit Box contents are not protected in the same way that other bank products are. The FDIC does not suggest using a safe deposit box to store cash. And, because financial companies do not keep track of what is in your Safe Deposit Box, I strongly advise consumers to picture the contents and keep a list.
Furthermore, while a Safe Deposit Box protects your vital documents, it is not the greatest place to deposit one’s will because, in the event of death, heirs may not be able to easily access the Safe Deposit Box. Finally, a Safe Deposit Box is not a substitute for a house safe, where you might keep valuables you’d want to access immediately in an emergency.
In Conclusion
Safe deposit boxes are an additional feature provided by some institutions. Customers can rent a box in the bank’s vault for an annual fee to keep their valuables and vital documents secure. However, this safety is not absolute: safe deposit boxes, unlike conventional bank accounts, are neither insured nor governed by federal rules.
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