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Should You Rent a Safety Deposit Box?

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Safety deposit boxes are those metal boxes inside the vault at your bank or credit union. You rent them by the year, the amount of rent varying by the size of the box.

We have always had a safety deposit box, probably because both sets of our parents rented one and encouraged us to do so as well. However, I have a feeling most people don’t use them. One reason for this may be that banks are starting to eliminate their availability.

What we store in our box.

While I’m not going to give you a detailed list, we are typical safety deposit box users in that we store things like car and house titles, negotiable documents (stocks, bonds etc) home inventory, valuable coins, mementos and jewelry and etc in them. In addition, I keep a backup copy of digital pictures and files and a copy of our wills and trusts (originals at home). We have graduated to the super large size, which is about $200 a year to rent.

Why we use a box.

Although we also have a home safe, we didn’t get that until about 10 years ago. We use a bank box to ensure that important papers and things are stored away from the house in case we are robbed or subject to a natural disaster that destroys the house.

I use the home safe to store less important papers and photos, because the safety deposit box just doesn’t have room for everything. It is at least some protection against fire, but if we were robbed, the thieves would probably just wheel the safe out and take it with them. That is why nothing of real value to someone else is stored in it.

A bank safety deposit box are built to be highly “resistant” to fire, flood, heat, earthquakes, hurricanes, explosions or other disastrous conditions, more so than my home safe or metal filing cabinet would be.

They are fairly secure against theft. According to the FDIC.

“Safe deposit boxes are stored in concrete or steel vaults equipped with sophisticated alarms, locks, video cameras, motion sensors, heat detectors and other security devices. Most U.S. banks also have very strict access procedures, among them: verifying signatures, restricting access to the vault, never leaving anyone unattended inside the vault, and requiring two different keys (one being the bank’s “guard key”) to open a box”

 Negatives of using a safety deposit box.

They are inconvenient.

You have to get up and go somewhere to get to your stuff. The bank has to be open. You have to find and bring your key to the box. You have to wait around for an employee to let you sign in and get into the vault.

If you die and don’t have anyone else eligible to get into the box, the bank can seal it until the estate is settled, making any documents or valuables stored there inaccessible during the estate transfer process.

They are more public.

After you are in, you have to look through your box to do whatever you are doing. Although banks usually have a room for you to go into, sometimes it is not private, only has a curtain or if it has a door, the door isn’t lockable.

Assets can be frozen by IRS and court order can be obtained to open with reasonable cause (they think you have something illegal in there).

They cost money.

Although the yearly fee isn’t much, it is still a cost.

They are not insured by FDIC.

The bank is responsible for the contents only if proven negligent. The contents are not insured by the FDIC, but may be insured by your homeowners policy.

Alternatives to using a safety deposit box.

Depending on what you need to store, you may or may not want to shell out for a box. If all you need to do is have backups for electronic files, storing them at a trusted friend or relative’s house – or in the cloud is a very viable alternative.

A quality home safe might be a something you could use instead, but you would have to shell out quite a bit to get one heavy enough to not be able to be carried away as well as built well enough to be fireproof, waterproof and windproof in case of natural disasters.

Of course, you could do what folks used to do and just hide your valuables in and around your property – buried in a coffee can in the yard, sealed in behind the wallboard or some equally inaccessible solution.

Do you have a safety deposit box? Why or why not?

This post has been written by Marie from FamilyMoneyValues.com. Be sure to visit her site if you’ve enjoyed this post.

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AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

7 Comments

  1. Good post! Renting a safe deposit box is one good way to ensure that your valuables are in a safer place than your home. It lessens the risk of physical danger to you and your family compared to having them at home.

  2. I’ve had one for years. Mine is free! My banking relationship is very important and I can ask for and receive a lot of freebies. I think I am special, but I will ask for things and uusually I get them.

  3. I have one, and it’s free with my account. Really, I think it’s important to consider alternate locations for some very important documents or items, and thus think a safety deposit box is a good idea.

    • OK, how do you get a free box? Come to think of it I believe my new credit union offers this with one level of deposits, but it is the smallest box….


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