Choosing and Using A Safe Deposit Box

7.4 MIN READ

Thanks to digital banking, it might have been months or even years since you've stepped foot in a bank, but there's one reason to keep your physical bank branch - safe deposit boxes.

A safe deposit box is the only way to keep important valuables safe outside of using a fireproof home safe. Although some items don't belong at home because of the risk of theft or privacy, a bank provides the security you need.

Before renting, you should know everything about safe deposit boxes and how they work.

What Is a Safe Deposit Box?

A safe deposit box is a metal box that holds your valuable items, such as family heirlooms or legal documents, at either a bank or credit union. Most financial institutions charge an annual fee to rent the box and keep them locked up in a bank vault that you can only access with the help of a bank representative.

You don't have to worry about anyone else accessing your belongings because only the safe deposit box owner can access them.

Purposes of a Safe Deposit Box

Most people use the safety deposit box to store valuables they don't want at home. So whether you're concerned about the items being damaged or stolen or don't want to worry about the risk of natural disasters, you might keep them in a safe deposit box instead.

The safe deposit box should give you peace of mind, knowing your most valuable items are locked safely.

Common Names for a Safe Deposit Box

Safe deposit boxes go by many names, but they all mean the same thing. You might hear them called by their variations at different banks. The common names include:

Safe Deposit Box
Safety Deposit Box
Bank Safe Deposit Box

Are There Pros and Cons of Safe Deposit Boxes?

Like any bank product or decision to store items, you should consider the pros and cons of safe deposit boxes before storing your important documents or valuables. Nothing is 100% foolproof, so always know the risks before placing items in a safe deposit box.

Pros

Strong protection - Most banks have fireproof boxes to store items in their vault. This reduces the risk of a fire damaging your personal items.
You won't lose important items - If you're worried about losing important documents or other items, such as family heirlooms, you can have peace of mind knowing they're safe in your safe deposit box at the bank.
You can keep items safe from others - If you have issues at home or worry about someone gaining access to your valuable items, you can lock them away, and no one else can get access without your permission.

Cons

No insurance coverage - Banks don't insure the safe deposit box contents. FDIC insurance only covers deposits in checking and savings accounts, not safe deposit boxes. You can buy separate insurance coverage, but you must pay the premiums.
Limited access - You can only access your valuables during the bank branches' hours and with the help of a bank employee.
It's not free - You'll pay to rent a safe deposit box. The bank safe deposit box cost varies by bank and credit union, but no safe deposit box is free.
You can lose your items - If you don't renew your safe deposit box monthly, the bank could open the box, and the contents become a part of the unclaimed property.

What to Keep in a Safe Deposit Box

It's best to put items you won't need on short notice in your safe deposit box. Examples include:

Sentimental keepsakes
Bond certificates
Marriage licenses
Car titles
Real estate deeds
Paper stocks
Last will
Legal documents
Heirloom jewelry
School transcripts
Adoption papers

What to Avoid Keeping in a Safe Deposit Box

While safe deposit boxes are a good place to keep most items safe, there are certain things you shouldn't include, such as:

Cash
Passports
Medical directives
Firearms
Illegal explosives
Revocable living wills
Business papers
Uninsured valuables

You might wonder why you shouldn't put cash in a safe deposit box, but the answer is simple. First, there's no way to prove you had cash in your safe deposit box, so if it goes missing, no one can do anything about it. You can't insure cash yourself, and the FDIC insurance doesn't cover it.

Second, if you're going to keep cash in the bank, put it in a bank account where you can earn interest. Ideally, you'd put it in a long-term CD if you don't need it soon. This allows the money to accrue interest rather than collecting dust in a safe deposit box.

Safe Deposit Box Insurance

The FDIC or the National Credit Union Administration does not insure safe deposit boxes. Therefore, you are responsible for insuring any valuables you store in your safe deposit box. You can usually do this through your homeowner's insurance. If not, you can take out a separate policy to insure the valuables.

If you don't insure your items yourself, and someone breaks into the bank, or a natural disaster occurs, and you lose items, your loss would not be covered.

What Is a Safe Deposit Petition Program?

Your safe deposit box keeps your belongings safe from natural disasters and other people gaining access to them. This continues even after you pass away.

If your loved ones want or need access to your safe deposit box, they must complete a Safe Deposit Box Petition. This form goes to the probate court, which will then grant or deny access to the safe deposit box.

Renting a Safe Deposit Box Cost

Renting safe deposit boxes costs money. How much varies by bank and the agreement you sign.

The cost depends on safe deposit box sizes, the bank you rent at, and the region you live in. Most banks in the same area charge around the same amount to rent a safe deposit box.

On average, you'll pay $50 annually for a 3 x 5 safe deposit box, $90 for a 3 x 10 safe deposit box, and $190 for a 10" x 10" safe deposit box.

Key Takeaways to Understanding Safe Deposit Box

A safe deposit box can keep certain belongings safe, but not everything belongs in them. Don't put items you might need in an emergency or quickly. Even though most banks open daily, except for Sunday, you never know when operating hours may change or when you may need important documents in the middle of the night.

FAQs

What Does a Safe Deposit Box Key Look Like?

The largest telltale sign that a key belongs to a safe deposit box is the imprint of the bank's routing number on it. Most safe deposit boxes have two keys, one that the owner keeps and one that the bank keeps to ensure the safety of the items.

What Will Happen to a Safety Deposit Box's Items After a Death?

The contents of a safe deposit box remain untouched unless the owner names another key holder in the contract. If another person is named, they can access the box anytime, including after death. If not, the laws vary by state but usually require a court petition to access the contents.

What Happens to a Safety Deposit Box After It Is Abandoned?

If you don't pay your safe deposit box rental fee, the bank can make your belongings a part of the state's unclaimed property and empty the safe deposit box.

Who Can Gain Access to My Safety Deposit Box?

Only people named in the safe deposit box contract with a signature card on file and a safe deposit box key can open the box. Anyone without a signature card on file and the key cannot access the contents.

Are All Safety Deposit Boxes Fireproof?

Don't assume your bank has a fireproof safe deposit box. Always ask about the protection provided. Nothing is 100% fireproof, and they aren't waterproof, so it's best to take precautions, such as protecting important valuables in plastic, just in case.

Where Would I Find a Firesafe Deposit Box?

Ask your local bank about their safes to determine if they are fire safe. If they can't confirm their safes are fireproof, it's best to look elsewhere.

Choosing and Using a Safe Deposit Box: The Bottom Line

There are many reasons to use a safe deposit box, but don't assume your items are 100% safe because they're locked up in the bank. While more precautions are taken at the bank, including who can access a safe deposit box, there's always a risk of fire, flood, or theft.

Choose safe deposit boxes at a local bank with a good reputation that's easy to access should you need the items and that charges a fair fee for the box rental.

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