You put your money in a bank. You put your food in a refrigerator. You put your clothes in a closet.
Where do you put your jewelry, your rare stamps or coins, or your important papers?
Those items belong in a safe deposit box.
A safety deposit box is a miniature safe-like box inside a bank. These boxes are vaulted and sealed for the ultimate safety and protection of your items.
Here are 5 pros and 5 cons to storing your valuables in a safe deposit box…
Reasons To Use A Safe Deposit Box
#1 – Your items are protected from fire, flood, or other natural disasters at home.
A natural disaster can destroy much more than the house itself. It can destroy memories — like photographs, jewelry, birth certificates, and other important records. You should keep your most valued possessions, copies of your important papers, and even your photographs in digital form in a safe deposit box away from the house.
#2 – It’s a cost-effective way to keep valuables private and safe.
Only you know what’s inside your safe deposit box — not the bank, not your relatives, not anyone that you don’t personally tell yourself. The cost for a safety deposit box varies depending on size. Rental fees are charged annually.
- The smallest box is 2″x5″ and 12 inches long. Rent is typically between $15 and $25 a year.
- A medium box measures 4″x10″ and is 12 inches long. The annual rental fee typically falls between $40 and $65.
- The largest box offered is 15″x22″ and 12 inches long. Rent is usually between $185 and $500.
#3 – Your items are protected from theft at home.
Your valuables can’t be stolen from your home if they’re not there. A safety deposit box is a great way to give you that extra peace of mind — just in case your home is ever burglarized.
Opt for a bank safe over a home safe. While home safes can be had for as little as $99, they’re much easier for thieves to crack. Most home safes weight less than 100 lbs, so it’s not that difficult for thieves to walk off with your safe — and your valuables. That’s not going to happen with a bank safe, which is both heavily guarded and securely constructed. Source
#4 – Your items are protected from being lost or misplaced.
If you’re the type to misplace papers and other items, then you might benefit from using a safe deposit box instead of trying to keep things organized at home.
#5 – Your family members will know where to find your important papers.
If you have a copy of something important (like your will or insurance papers) in a safe deposit box, your family members will be able to retrieve those items if you, personally, cannot.
If you rent the box only in your name, then you, a power-of-attorney, or agent you designate are the only ones who can get into the locked box. A safe-deposit box rented jointly with a spouse, child, or friend means those people also have access. Experts say it’s wise to have a designated power of attorney to handle your financial affairs — including access to your box — in case you are unable to because you are disabled or traveling, among other reasons. If you have a power of attorney, getting into your safe-deposit box won’t be a problem. Source
Of course, safety deposit boxes are not without their issues…
Downsides Of Safe Deposit Boxes
#1 – A safe deposit box can only hold so many items.
Safety deposit box sizes start at 3”x5” and are as big as 15”x15”. There are definitely size limitations as to what you can put inside a safe deposit box. You are mostly limited to jewelry, papers, and other small items. Keep in mind, you can rent 2 small boxes for about the same cost as one large box.
#2 – You must keep track of the key.
If you are someone who often loses or misplaces keys, then you will need to take extra-special care to not lose the safe deposit box key! Banks cannot let you into your safe deposit box without a key. If you do lose the key, you will have to pay the bank for special locksmith services to get another key made — and replacement key charges can be very high. As a precaution, you should make a copy of your safety deposit box key and keep both keys apart from each other and in safe places (not with your house keys or car keys). Don’t keep the keys on a keyring or in an envelope with the bank’s name or the location of your safe deposit box. Give your extra key only to someone you trust.
Each box is equipped with a double lock, requiring 2 keys — One is a guard key, the other is the customer’s key. EACH KEY IS USELESS WITHOUT THE OTHER. No one can open or lock your box without your key. Source
#3 – You don’t have 24/7 access to your safety deposit box.
Safe deposit boxes are located inside banks — which have limited hours. Also, if the owner of the safe deposit box is deceased, then the box may be sealed for weeks with important documents inside of it. (To open a sealed safe deposit box, estate representatives are required to provide court papers to the bank.) It may be best to store the original documents in a safe at home and use the safety deposit box as a place to keep back-up copies.
#4 – Items can still get damaged in a safe deposit box.
While safety deposit boxes are “resistant” to fire, flood, heat, earthquakes, hurricanes, explosions and other disastrous conditions, there is no guarantee that your items will not get damaged. It’s wise to put your valuables in a waterproof container before putting them in your safe deposit box for added protection. Also, put your name on each item and take photos of your most prized items left inside the box. That way, if a disaster occurs your chances of successfully recovering an item would be increased.
#5 – Items can still be stolen from a safety deposit box.
Safe deposit boxes do get robbed, but this is rare. Thanks to alarms, cameras, motion- and heat-detectors, the items in your safe deposit box are much safer there than inside your home. Still, if items are stolen, you may not be able to recoup the loss. So it’s wise to add a homeowners or renters insurance rider to cover the items kept inside your safety deposit box.
Should you be involved in a discrepancy with the Internal Revenue Service, your box contents can be frozen and you will not be able to access the contents until the dispute has been settled. If the bank suspects your box is involved with any suspicious activity, a court order can be issued and the Department of Homeland Security can be given access to your safe deposit box. Source
Items To Keep In A Safe Deposit Box
Following are the most important things that you should keep in a safe deposit box:
- Copy of your will (depends on the state you live in)
- Copy of insurance policies
- Titles to your house and cars
- Detailed list of bank and brokerage accounts, CDs and credit cards
- Marriage license / Divorce decree
- Expensive, rarely-worn jewelry
- Birth certificates
- Family heirlooms
- Stock and bond certificates
So, what should not be stored in a safety deposit box?
Anything you might need in an emergency, in case your bank is closed for the night, the weekend or a holiday. Possible examples: originals of a “power of attorney” (your written authorization for another person to transact business on your behalf), passports (in case of an emergency trip), medical-care directives if you become ill and incapacitated, and funeral or burial instructions you make. Consider giving the originals to your attorney, and making copies to go in your safe deposit box or to give a close friend or relative. Source
View a complete list of other items that you may want to keep in your safe deposit box.
The rule of thumb when deciding what to put into a safe-deposit box is if the following statement applies to the item: “If these documents were lost, I’m in big trouble now.” Some people may be reluctant to put items into their boxes because of privacy concerns. But such fears are unfounded, as liability concerns keep banks from prying into safe-deposit contents. Source
In the end, I really do recommend that you use a safe deposit box for your valuables and important papers. The takeaways are:
- Take care of the key.
- Waterproof each of the items first.
- Only store copies of your papers inside the safety deposit box.
More About Bank Safe Deposit Boxes
- FDIC: 5 Things To Know About Safety Deposit Boxes & Your Valuables
- How To Make Sure Your Safe Deposit Box Contents Are Secure
- Should You Keep Jewelry In A Safety Deposit Box?
- Q&A About Bank Safe Deposit Boxes
- How To Find Out If A Deceased Persona Had A Safety Deposit Box
- Should “The Cloud” Be Your Safety Deposit Box?
- 6 Reasons To Choose A Bank Safe Over A Home Safe
- Why Valuables In Safe Deposit Boxes Sometimes Get Lost
I have been a certified tightwad since I became pregnant with my first child and decided to find a way to stay home with him. I enjoy sharing my experiences in my journey back to financial health and planning for a future — which will include sending 2 kids to college and early retirement.