A safe deposit box (or safety deposit box) is an individually secured container—usually a metal box—situated in the safe or vault of a federally insured bank or credit union. These boxes provide a fortified environment to protect valuables, important documents, and sentimental items. Customers rely on the intense security of the bank building and vault to ensure their contents remain safe.
Key Takeaways:
- Safe deposit boxes are designed to withstand natural disasters such as fires, floods, hurricanes, and tornadoes.
- The only copy of an important document should never be stored in a safe deposit box.
- Safe deposit boxes are ideal for those uncomfortable with digital storage methods.
- It’s prudent to have a co-lessor on your safe deposit box.
How Safe Deposit Boxes Work
When you rent a safe deposit box, the bank provides you with a key to use in tandem with a second “guard key” held by a bank employee to access the box. If your bank utilizes a keyless system, you will use a fingerprint or hand scan. Identification, alongside your key or scan, is required every time you access the box.
An individual may rent a box solo or add others to the lease. Co-lessors gain equal access and rights to the box as well. Choosing co-lessors should be thought through carefully if individuals have certain liabilities, such as financial or judgment issues.
Some banks might require all lessors to be present to access the box. Designating someone with power of attorney can be a smart move for easier access.
Safe deposit boxes are ideal for storing irreplaceable documents along with small valuables and heirlooms. Remember, they come in modest sizes, so choose items that don’t require frequent access. Here’s a list of items perfect for safe deposit boxes:
- Personal papers like birth certificates, adoption papers, and marriage licenses.
- Copies (but not originals) of wills and powers of attorney.
- Military records and discharge papers.
- School transcripts and diplomas.
- Sensitive documents to avoid prying eyes.
- House deeds and car titles.
- Physical stock and bond certificates.
- Inventory of household valuables for insurance purposes.
- Important business papers.
- Backups of hard drives and flash drives.
- Valuable jewelry and small family keepsakes.
While they can’t be accessed 24/7, safe deposit boxes provide exceptional protection for these essentials.
Advantages & Disadvantages of Safe Deposit Boxes
Pros:
- Secure storage for important documents and valuables.
- Bank vault security includes guards, cameras, and alarm systems.
Cons:
- Contents are not insured like bank accounts.
- Access limited to bank operating hours.
- Possible loss of contents in extreme disasters.
Special Considerations
Safe deposit boxes face declining popularity as digital storage rises. This trend makes finding an available box easier or more difficult, depending on the bank’s offerings. While older generations might still prefer physical storage, younger generations lean toward secure digital options. Consequently, some banks now offer complimentary boxes based on account type and balance.
Cost of Safe Deposit Boxes
Prices for safe deposit boxes vary based on size, bank, location, and availability. Generally, costs range between $15 to $350 annually for commercial banks in the U.S.
Can a Bank Access Your Safe Deposit Box?
Unlike regular accounts, safe deposit boxes are not harshly regulated or insured under federal law. Banks can open your box under specific conditions such as court orders, search warrants, account delinquencies, or closures. Your state’s legal specifications and bank’s agreements outline these provisions.
What Not to Keep in a Safe Deposit Box
While suitable for many items, avoid placing the following in a safe deposit box:
- Passports
- Only copies of living wills, medical directives, and powers of attorney
- Uninsured valuables
- Cash
- Any illegal items
Bottom Line
Safe deposit boxes offer supplementary security over home storage for valuable items and critical documents, providing peace of mind for a reasonable annual fee. However, federal insurance doesn’t cover them, so store irreplaceable documents elsewhere. Staying informed about beautiful alternatives ensures you always make the safest choice for your prized possessions.
Related Terms: home safe, digital storage, bank security, financial safety.
References
- Eddy & Schein Group. “Safe Deposit Boxes – A World of Their Own”.
- Federal Deposit Insurance Corporation. “Five Things to Know about Safe Deposit Boxes, Home Safes and Your Valuables”.
- Federal Deposit Insurance Corporation. “Your Insured Deposits”.
- Office of the New York State Comptroller. “Unclaimed Property Relating to Banking Institutions – Reference Sheet”, Pages 4 and 8.
- My Bank Tracker. “How Much Does a Safe Deposit Box Cost at the Top US Banks?”
- Office of the Comptroller of the Currency. “I Am Missing Items from My Safe Deposit Box. What Can I Do?”
