If you are like me and you are afraid to lose or have stolen your valuables, you might have considered renting a deposit box at your Bank. You can store your jewelry, important papers and other valuables in what is regarded as the safest place: the vault of a bank. But how to use it? Is it recommended? There are many things to learn to use a safe deposit box properly, and mostly, to decide beforehand whether to rent one or not. I hope I will help you make your mind and decide between a safety deposit box at your Bank or a safe at home.
What is a safe deposit box? A safe or safety deposit box is locked storage in the vault of a bank or a secure area… The box is protected by a lock with one or two independent keys. You usually have to cash in to get access to the vault. And if the lock has two keys, another person, usually a bank employee has to come with you to open the box. Keep track of what is inside. Do not put cash because it can get stolen. Always ensure the content of the box. And do not forget to pay the annual fee.
It is often regarded as the safest place to store your valuables or most precious jewelry. But there are stories telling that its content has been stolen, especially if it is cash. So who to trust? How to use a safety deposit box in the safest manner? What are the dos and don’ts when it comes to safety deposit boxes?
How much does a safety deposit box costs?
You have to pay an annual fee for the box, ranging anywhere from $20 to $200 per year, depending on its size, location, the Bank and the type of account you have.
If you add up the cost of the deposit box itself and the cost of additional insurance, costs add up.
Try to get a rebate on your home insurance arguing that you emphasize safety. Sometimes, a home safe can lead to cheaper insurance because your valuables are better protected thus less likely to get stolen (and reimbursed by the insurance company). Ask your insurance broker, this might be the base of a negotiation. You might at least get back the value of the insuring of the box.
Remember, there is no more a tax break for a safety deposit box. The cost of the rental is not deductible any longer. And it is unlikely to be the case again.
If you are a good client in your bank, you might have a free or at least cheaper deposit box, if your insurance broker agrees to give you a discount, then a safety deposit box might be even cheaper than a home safe. Otherwise, you should do the math carefully and add up each and every cost (renting fee plus insurance) and decide which is better (and cheaper) between a safety deposit box or a home safe.
How to use a safety deposit box
When you decide to rent a safe deposit box, you should choose the bank you know well and where your accounts are located. If of course, they provide the service.
You will then receive a key. But you can’t just go into the bank and rush to the vault. You need first to check in with an employee who will follow and assist you to the vault. You will be guided to your deposit box and the employee will provide the second key necessary to open the box in conjunction with yours, to open the lock.
You will, of course, need to ask for help and sign out when finished.
Some banks have an electronic access management system that will allow access by finger scanning.
Remember that you won’t be able to access your box 24/7 but you will be restricted to your bank opening hours, typically Monday to Friday, from 9 a.m. to 5 p.m.. And your bank will be closed on holidays and weekends.
Are safety deposit boxes still commonly used?
Deposit boxes are less and less used, especially among younger customers. The demand has dropped significantly now that we store more and more thing online. Bonds, Stocks, money and even “papers” are dematerialized.
But one out of two banks still offer the service of a safety deposit box, said Chase Bank. It is still popular among customers and this is why it might be considered even now.
What to store and NOT to store in a safe deposit box?
Never put in your safety deposit box items you might need in a moments notice or in an emergency.
You can store:
- important documents (in plastic bags),
- jewelry you don’t wear
- collectibles of good value
You can’t store:
- your will
- your medical directive
- your passport
What to do with your safety deposit box
1. Always know what is inside You should always keep track of everything inside. The list should be kept at your home, together with some pictures. It is the only proofs you will have in case of theft to present to your insurance.
You should definitely check from time to time what is inside your safe deposit box and store its list… in your home safe.
2. Protect your belongings against moisture: In the vault of an old building, especially in the basement, humidity can be a problem. Moisture can stain and degrade paper. You should be very careful if you store your important documents at the bank for a long period of time. And a safety deposit box is used in that only purpose. We have discussed with many details how to prevent and fight moisture in your home safe and whether or not to install your safe in a humid room. In the vault of a bank, you won’t be allowed to do anything. This is why the only thing that will help you against humidity is to enclose your important documents in plastic bags that are airtight and waterproof.
3. Consider getting an insurance: The items in your deposit box are not covered by the insurance of your bank. If you plan to store important and pricey items in your box, consider contracting insurance separately. It will add up with your homeowner’s policy, but on the other way, you can save on your home policy if you store items in your box…
Keep in mind that cash is not covered by insurance.
What NOT to do with your safety deposit box
1. Do not lose the key If you ever lose the key, you will have to tell the Bank. Keep in mind they don’t keep a copy of your key, or any of the keys. Everything is written in the small prints of your contract.
Their professional locksmith will be asked to drill the door of the safe, change it, at your expense of course. You won’t have another choice. And it might be pricey. You have understood that you won’t have a chance to come in with your handy neighbor and his tools to give a hand.
Don’t lose the key, because you will be handed the bill of rekeying the door of your safe deposit box.
2. Do not forget to pay rental fees Once again, it is written in the small prints of your contract. After some time, the bank is allowed to sell the content of your box (your valuable, that is) to pay delinquent fees. This is another pricy careless behavior.
3. Do not store cash it can be stolen: Keep in mind your cash is not covered by your insurance and can be vulnerable to theft. It is best, of course, to put your cash in your bank account where it is risk-free.
4. Do not store your will: If the box is recorded at your name, you don’t want to store your will or any document that your heirs might need. Remember that a lawyer or notary might need the very will inside the safe to open the safe. It can be an endless loop or at least a tiresome one.
5. Do not forget you depend on your bank opening time: You will have access to your valuables and important documents from Monday to Friday, from 9 to 5 only, excluding weekends.
It is somehow a bit cumbersome to use a safety deposit box at times. We have covered all the drawbacks. A safe at home can be easier and cheaper to use. This is why.
When to chose a safety deposit box over a safe
The vault of a bank is maybe the safest place to store your valuables. There is virtually no risk for a burglar to come and drill open the box. A fire is very unlikely to happen as well as a flood. Literally, everything has been thought out and done to prevent any risk.
There are many layers of security, one on top of another, that is to say, redundant if something should go wrong.
All the dangers that can occur at your house don’t exist in a bank vault.
On top of that, there is additional insurance that protects your valuables (excluding cash of course) if you decide accordingly and pay for one.
When to choose a Home Safe over a Deposit Box
Even in the vault of a bank, your valuables are not 100% risk-free. Even if there is a little risk (that is to say close to 0%) of a robbery, many things can happen such as:
- the key is lost,
- the box is opened mistakenly by staff,
- the fee is due and the content of the box is sold,
- important documents are damaged by humidity or flooding.
If you need to store your will, some cash, jewelry that you want to wear often, a passport that you might need any time, etc. …
If you need to store important electronic backups you need on a daily or weekly basis,
If you need to store documents for work and have access to them …
Then, you may be better off keeping your valuables at home.
You will have the comfort to know that you can access your safe without the need of anybody, at any time, day and night, weekends and Bank Holidays.
Furthermore, a deposit box can end up pricey if you add up renting fees and insurance: you might as well save money if you buy a good fire-resistant home safe.
Who has access to your box and what will happen if you die?
You can decide to be the only one to have access to your box; you can decide to have co-lessors that will be able to access the box the same way as you.
If an attorney is in charge of your financial affairs, it is wise to give him access to your safety deposit box, in case of an emergency if you are away, ill or any other incapacity.
It can prove to be a good idea to ask the bank beforehand what will happen if a party on the deposit box lease dies. Then, you should decide what document to store in the box.
If you are alone renting the box, it will be sealed and your attorney won’t have access to the box to manage your estate. How long will it take your attorney to gain access? It will depend on the State, the Bank, and if he needs instructions from a court.
If several people are co-lessors, the box should remain accessible. The box used to be frozen and the bank would wait for a court. But this is no more the case now. The executor will demand access to the box in order to manage the deceased person estate.
Conclusion
A home safe is often simpler to use and cheaper. More and more people go that way. But there is a peace of mind knowing that your most important valuables are out of risk in the safety of a bank’s vault. This is up to you.
As of me, I have decided on a safe and I don’t regret it. I prefer to store my belongings at home, not far from me.