Bank safe deposit boxes may seem like a remnant of a bygone era to some. Keeping financial information and other vital documents in a bank vault sounds like a thing of the past now that digital storage is so commonplace.
Indeed, the use of safe deposit boxes appears to be declining. Banks that still have deposit boxes claim they’re lying empty, according to the New York Times, which notes that many no longer provide them.
Safe deposit boxes, on the other hand, have their place. The original paper copy of various documents, such as your birth certificate or the deed to your property, is still necessary even in today’s mostly paperless digital world. And you still can’t generate digital reproductions of precious physical items, like family heirlooms or treasures, if you want to. A safe deposit box is still the best option for storing these priceless documents and possessions.
However, this does not imply that you should keep all of your valuables in a safe deposit box. Only when the bank is open can you get to your possessions stored in a safe deposit box, making it difficult to obtain important documents in the event of an emergency. There are also tangible goods that should be housed elsewhere for various reasons.
To help you decide what to keep and what not to keep in your safe deposit box, we’ve compiled this list. If you don’t already own one, these are some of the things that could persuade you to.
How Safe Deposit Boxes Function
A safe deposit box is a long, thin metal box held in a secured chamber at a bank or credit union for those who have never seen one in person. Because a conventional box includes two keyholes, the only way to open it is to enter both keys simultaneously. You keep one key while the bank keeps the other. If you share the box with another individual, such as a spouse, each of you receives one copy of the renter’s key.
Having two keys provides an additional degree of protection. If someone takes the key to your safe deposit box, they will be unable to open it without the assistance of a bank staff.
The bank, on the other hand, will not unlock a box or the closed chamber where it is stored for just anybody. Most banks need some form of identification before opening a box, such as a signature that can be compared to your signature on file.
A safe deposit box is an optional feature that is not included with a standard bank account. According to The New York Times, banking institutions charge between $20 and $200 each year for a box, depending on the size and location of the bank. However, certain bank accounts provide a charge reduction.
In addition to a safe deposit box, you may keep your valuables and essential documents in a variety of other locations. Fireproof safes may be used to keep these goods safe at home.
But experts claim that a safe deposit box is more secure. Simply said, most home safes may be taken anywhere. It’s possible to have a safe installed in your home’s wall, but it’s quite pricey.
That means a thief may simply steal your safe and subsequently drill into it to get at the valuables inside. In addition, if burglars break in while you’re home, they might compel you to unlock the safe for them.
Natural catastrophes are more protected in a safe deposit box than they are in a regular bank account. A normal home’s fires and severe winds can generally be resisted by bank vaults.
Floods, on the other hand, are a natural calamity that they cannot always prevent. A waterproof plastic container or zip-top plastic bag is recommended by experts before putting sensitive papers, pictures, and other vulnerable objects in your safe deposit box for protection. There is an added layer of protection from flooding.
Although a safe deposit box is the most secure way to keep valuables, it is also the least convenient. You may only access your box during bank hours, and you may have to wait a bit for a person to assist you in accessing the box. And, because many bank locations don’t have safe deposit boxes, you may have to keep yours at a branch that isn’t close by, which means more driving to and from the bank.
This will be an even greater issue during the COVID-19 epidemic in 2020 and 2021, when several major banks, including Bank of America, will be temporarily closing certain local bank offices.
Another issue is that storing valuables in a safe deposit box does not ensure their protection. Banks occasionally open a customer’s safe deposit box by mistake and lose part of the contents. Every year, a few hundred people claim that expensive things have gone stolen from their safe deposit boxes, according to The New York Times.
Worse, in circumstances like these, the bank is not compelled to pay you for the missing things, even though it is plainly at fault for their loss. Items in a safe deposit box, unlike money in your bank account, are not insured by the FDIC; nonetheless, the FDIC guarantees that if your bank fails and the government takes over, you will have access to your safe deposit box within one business day.
A few banks offer separate insurance plans that protect valuables in safe deposit boxes, but the vast majority do not. You may not even be able to sue the bank to recover your losses since many banks restrict their liability for missing items in their safe deposit box rental agreements.
You must have your own insurance to protect yourself against the loss of things in your safe deposit box. Your home’s insurance policy may give some coverage for objects held “off-premises,” that is, not on your property, but it is generally limited to a small sum. If you wish to put valuables in a safe deposit box, you may need to add a specific addendum, or “floater,” to your policy. This document can be created with the assistance of the insurance agent who manages your coverage.
The good news is that insurers sometimes charge less to cover valuables if they are securely stored in a bank. First, you must have the individual pieces assessed. Then you may call your insurance carrier to increase coverage for the goods’ worth.
What Should You Keep in Your Safe Deposit Box?
A safe deposit box is the finest place to hold confidential papers and valuables that require the utmost protection. Keep these items in mind when packing your suitcase.
- Property Records
You’ll have to deal with a lot of paperwork when you buy a property. Some of them could be worth keeping, such as:
- Deed. When it comes time to sell your house, you’ll need the deed as proof of ownership. Also, you may need it to show that you own the record.
- Documents of Settlement. The closing statement and other settlement paperwork reveal the amount you paid for the property. In the event of a home sale, you’ll need this data for tax purposes.
- A survey of the property. The borders of your property are shown on this page. If you ever find yourself in a fight with a neighbor about property borders, this may be a useful tool.
- Inquiry Title. If someone challenges your ownership of the property, a title survey and title insurance will be critical.
These documents may be critical in certain situations, but they are unlikely to be needed in the future. They will be safe in your safe deposit box, and you can get to them if you need to.
- Car Title
This is a document that is vital but seldom used, and it’s difficult to replace in the event that you lose your automobile title. Because of this, a safe deposit box is the best option. To make selling the automobile easier, you can store the title in your bank’s safe deposit box until the time comes.
- Important Personal Documents
Keeping the originals of crucial documents in your safe deposit box is a smart idea.
- Certificates of birth (yours or your children’s)
- Adoption papers
- Certificate of Marriage
- Certificate of Divorce
- Certificate of death for a spouse or other close family
It’s doubtful that you’ll ever need any of these documents, but if you do, locating a duplicate will take some time and effort. A cost is required, and you’ll have to wait for days or weeks for your paperwork. It’s a lot easier to keep them in a safe place.
- Social Security Card
According to financial experts, keeping your Social Security card in your wallet is a major no-no. In the event that your wallet is stolen or misplaced, your Social Security number may be used for fraudulent purposes.
Moreover, the likelihood that you’ll need to present your Social Security card as ID on any given day is low. No matter how many times you need to use it, you may learn your Social Security number by heart.
If you need to get a new driver’s license or close a real estate deal, you won’t need to carry around a physical credit card with you. The safest location to put your valuables is in your bank’s safe deposit box.
- Stock & Bond Certificates
Buying equities, Treasury bonds, or corporate bonds is now a mostly electronic process. You don’t have to worry about losing or securing your digital ownership of the objects because the records are saved on a server.
Until recently, these kinds of purchases were accompanied by real paper certificates. The New York Stock Exchange, according to Kiplinger, required printed certificates for stock transactions until 2001, while certain banks continued to offer paper savings bonds until 2011. Savings bonds from the Series I are still sent to you by mail if you use a portion of your tax refund to purchase them now.
There is only one way to prove that you hold the securities if you have any of these old-school paper certificates. If a certificate is lost or destroyed, the Securities and Exchange Commission offers a process for replacing it. However, the process is lengthy and complicated.
Locking up the originals in a safe deposit box is considerably easier than maintaining a record of the numbers or a photocopy of the certificates at home in case something happens.
- Small Valuables
Small, precious objects can be safely stored in your safe deposit box together with your important paperwork. One such example is jewelry. Even if it’s an expensive piece of jewelry like an engagement ring, you’ll want to keep it at home because you wear it all the time. Regardless of how valuable it is.
Tiaras and other expensive jewelry that you only wear on special occasions can be safely stored in your safe deposit box. The box may also be used to keep precious family jewels that you don’t wear anymore but don’t want to part with.
Small treasures can also be stored in a safe deposit box. It is obvious that some collections (such as antiques and ceramics) are too large to accommodate in a safe deposit box. It’s possible that your bank may be able to store and secure any smaller objects that you collect (such as stamps, coins, or old baseball cards). It’s as simple as opening the box anytime you’d like to add or remove an item for sale from your collection.
Always check your insurance coverage before storing anything of value in your safe deposit box. Owners’ insurance does not often cover valuables kept outside the property, as previously mentioned. Safe deposit boxes are more secure than most facilities, but they are not damage-proof, and there is no use in risking a precious collection with them.
- Treasured Reminiscences
Even though the goods you treasure aren’t worth much money, they hold special meaning for you because of the memories they evoke. Personal papers such as letters from loved ones or old diaries, whether yours or those of a long-deceased relative, can be safely stored in a safe deposit box.
Having a copy in digital form is better than having no copy at all, but there’s nothing like holding a treasured object in your own hands.
The box may also be used to save old family pictures that were shot before digital cameras and online storage were commonplace. If you have the negatives, you can retain the original prints in your family book while storing the negatives in a safe deposit box.
If you don’t have a scanner, take a copy of the images before putting them in a safe place. To be extra certain you won’t misplace your digital copies, save them on the cloud, on a thumb drive, or on both.
- Inventory of the Home
Your insurance provider will want to know exactly what you lost and how much it was worth if you ever have to submit a claim following a natural disaster, such as a fire or flood. Your memory, on the other hand, isn’t always reliable when it comes to remembering everything you possess.
Because of this, insurance companies advise their clients to compile a home insurance inventory, which includes a list of all their possessions and an estimate of their value.
Making a house inventory may be done in many different ways. To keep track of your belongings, you can write everything down on a piece of paper, photograph each room and its contents, or record a video tour of your entire home.
Regardless of the technique you use, make sure you save a duplicate of the completed inventory in a safe deposit box. In the event of a natural calamity, your inventory will be safe and sound.
What You Shouldn’t Keep in Your Safe Deposit Box
It’s evident that your safe deposit box isn’t the best spot to keep anything that you could require at a moment’s notice. Because no one except you or your co-signer can go into your box, it’s not an appropriate location for crucial items that other people might need to access.
In addition, there are items that you can’t or shouldn’t keep in a safe deposit box based on bank policy. Outside of your safe deposit box, you should keep things like:
- Uninsured Valuables
- The Original of Your Will
- Letters of Instruction
- Advance Health Care Directive
- Power of Attorney
- Anything Your Bank Won’t Allow
- Your Passport
An inventory of the contents of your safe deposit box should also be kept outside of it. When a natural catastrophe strikes, you’ll know precisely what you lost so that you may either replace the missing papers or make an insurance claim for the goods that were harmed in the disaster. In the case of your death, this list will tell your heirs what’s inside the box if they can’t immediately access it.
In an interview with The New York Times, financial advisor David O’Brien suggests routinely checking your box to ensure everything on your list is still in there. However, it is not unheard of for safe deposit boxes to be emptied. He claims he once had a relative whose bank accidentally drilled into her safe deposit box and emptied it because the bankers mixed up her box number with that of a depositor who hadn’t paid the fee. Fortunately, she was able to reclaim the contents of the box since she was aware of what was inside of it.
Make sure you pay your safe deposit box’s fees on time, as another lesson from this article suggests. Banks have the right to drill open your box and sell the contents if you haven’t paid your rent for an extended length of time in most states. The easiest approach to ensure the safety of your valuables in your safe deposit box is to make timely payments.