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How To Use Safe Deposit Boxes

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When I was a kid, there was always this mystique about safe deposit boxes. My parents never had one so the only experience I had with them involved television shows or movies. The scenes were always of bank robberies, of masked men and women running into a smoke filled room filled (after they blew open the door of course!) with hundreds of these boxes all stacked up nicely and neatly in their little cubbyholes. Inside each was a little treasure chest of riches and these crooks were here to take them.

It wasn’t until I was an adult did I realize that they typically held more pedestrian items such as important paperwork (car and house titles, marriage licenses) rather than sexy uber-valuable jewelry one could fence.

Basics

When you get a safety deposit box, you’re essentially renting space inside a bank to store your valuables. The contents of the box are known to you alone, the bank has no right to see what’s inside nor do they really care. When you rent the box, you sign a rental agreement and are issued a key to access the box (the bank does not keep a copy, so don’t lose it or they’ll have to drill into your deposit box – $$$). Only those names that appear on the rental form will be able to access the box 9you won’t be able to give the key to someone and have them get something for you. You can appoint a “deputy” or “agent” who can be given access to the box; you do this by appointing them in the presence of all the names on the rental agreement and a bank employee. Power of attorney does not allow access to a safe deposit box.

Why a safe deposit box and not your closet? Banks will have more security and better protection against catastrophes like fires, floods, and theft. It’s that protection that makes it superior to hiding it in a shoebox in your closet or in a safe in your own home.

Law enforcement: Law enforcement can get access to your safe deposit box if they believe there is reasonable cause to suspect you’re hiding something illegal (they get a court order to open the box). Another way the law can get you is if the IRS freezes your assets, your safe deposit box is included. Finally, your box can be declared abandoned if you fail to pay the fee for a number of years, determined by state law, and all reasonable attempts to contact you have failed.

Bank failures: FDIC insurance does not cover the contents of your box nor should it need to. If the FDIC finds a buyer for the bank, you now can sign a rental agreement with the new bank. If the FDIC can’t, you’ll get access to your box to remove your contents.

What happens if the contents are destroyed? If the contents of the box are destroyed or stolen, you typically turn to your own homeowners insurance. The bank does not insure the contents of your box. If you do get a safety deposit box, call your homeowners insurance company to ensure the contents are covered.

What To Put Inside

If you have no idea what you’d do if you lost it, put it inside a safe deposit box. The superior fire and flood protection makes it a good place to store important documents like family records, insurance policies (a home inventory!), marriage licenses and certificates, any deeds or titles, other important agreements like leases and rental agreements. Beyond documents, you can also put things that either have a lot of monetary value (jewelry or rare collectibles) or emotional value (delicate family photos) for protection.

Here are some quick tips about putting things in a safe deposit box:

  • Put the items in air-tight plastic containers or plastic bags, this will protect against water damage (though the plastic could melt in a fire). The boxes should be resistant to fire and flood but water can’t get into a sealed plastic container as easily.
  • Keep an inventory of what’s in your safe deposit box, this will help keep everything in order. Keep a copy of the inventory with you and leave one in the box.
  • Copy everything that goes into the safety deposit box. If something does happen to the box, you have a copy that can help you out in a pinch. Also, if you really need to get a document and the bank is closed, oftentimes a photocopy will be enough to get a process going until the bank opens.

What NOT To Put Inside

Since you’ll be subject to the hours of operation of the bank, don’t put anything inside that you think you might need in a pinch. Banks will be closed at night, on weekends, and during holidays so you have to keep that in mind when you decide what to put inside.

Some original documents shouldn’t go into a safe deposit box include a lot of legally prepared documents like wills, power of attorney documents, and medical care directives. The originals should be on file with the attorney (this is often governed by state law) that prepared them and copies can go into your safe deposit box. In the event of your death, others will need to get access to those documents which will be difficult if you’re the only person allowed to access the box.

How Much Does It Cost?

This will depend on the bank itself and the size of the box. Here are three quotes from various banks that might help give you a better idea of how much they cost:

Anyone have experience with safe deposit boxes? Anything I miss or was unclear about? Please let me know in the comments, thanks!

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23 Responses to “How To Use Safe Deposit Boxes”

  1. MissMartha says:

    Don’t put your passport in a safety deposit box if you have a family member who is traveling outside of the country. This way, if you have to take an emergency trip you have access to your passport.

  2. Chutzpah! says:

    Small nag, Jim! Safe deposit box, not safety deposit box! :)

    Awesome blog btw! Congrats on going pro!

    -Chutzpah!

  3. jim says:

    Argh, I kept trying to make sure I wrote the right thing and missed a few places. :)

  4. We’ve had a safe deposit box for a few years now – I like knowing that I have secure copies of important docs (I have duplicate originals of docs like birth certs and marriage certs – just paid extra for ‘em), and that the really nice jewelry I never wear anyway is as safe as can be.

    But the effort it takes to get in there does minimize my trips. It’s not *that* bad, but it requires waiting in the teller line, informing the teller that I want to go back there, walking down to the end of the counter where the gate to go to the back is, then several minutes of signing papers and waiting for the teller to find the right keys. Then after I do what I need to do with the box, I have to go find the teller – they have to walk away to give us privacy, but they don’t exactly wait right outside the door. And then waiting til the teller puts the box back and gives me my key back, etc.

    I guess what I’m trying to say is that retrieving docs is not something you can really do in a rush.

    And thank you for the reminder to check with my homeowner’s policy – I don’t think I ever did that, so I’ll have to do that now.

  5. Evan says:

    Jim,

    You should really stress the Will in the safe deposit box more. When I was clerking (i.e. law student working for penuts) during law school I was at a firm that had to deal with this situation. IT WAS A MESS!

  6. CK says:

    Yes, any estate attorney will cry if you tell them you keep your will in an safe deposit box.

    Buying a sweet fireproof/resistant safe seems to be the way to go.

  7. Meg says:

    I still think of safe deposit boxes as mysterious and exciting, and I work at a bank so I should know better. :) I’ve been wanting to get one lately for the basic reasons: I need to put my social security card, passport, and perhaps some backup documentation of insurance, etc in there.

    But at the same time I imagine myself keeping inside some expensive jewelry – which would require trips to the box whenever I wanted to wear it for a party – along with a wad of cash (perhaps in different denominations). I could be that mysterious lady who comes into the bank once or twice a month – to get travelers checks, exchange money, visit my safe deposit box; all the tellers would wonder at what an exciting life I must lead! :)

    OK back to reality.

    • Mike says:

      Meg your comment is so funny lol. Even though it is for years later and you probably forgot that you wrote it by now lol

  8. Brad says:

    Hundreds of people learned this summer in Iowa City and Cedar Rapids that safe deposit boxes are not immune from quickly rising waters. For months now, firms have been teaching people how to dry out their contents with special materials and how to stop the mold growing inside their documents. Even high and dry boxes started growing dark mold on the documents.

    Everything inside your safe deposit box needs to be placed in an envelope inside a sealed plastic bag. The envelop will keep the melted plastic off the contents in case of fire/heat.

  9. Eric says:

    I looked into a safe deposit box at my bank and walked away deciding not to get one. $250 / year was too steep for a legal sized box, even if I could get one, and it sounded like there might be a 1 year waiting list. For $250 I can buy a nice fireproof lock box and hide it somewhere safe.

  10. Rob says:

    Just wanted to add “Gold” to the Don’t Put Inside list. US Gold confiscation has happened before ( FDR did it ) and could certainly happen again. If you own gold, best to keep it yourself, under the radar.

  11. Jack Charron says:

    Thank you for your article.
    I have several questions.
    1. Should money be kept in a safe deposit box?
    2. Are there laws that restrict or prohibit money from being stored in a safe seposit box?
    3. What are your thoughts on placing money in a safe deposit box?

  12. jim says:

    Jack:
    1. I don’t see why not but I also don’t see what that gets you (other than the fact that the contents of the box are secret). In other words, for 99% of the population, you don’t get much out of putting cash in a safe deposit box.
    2. Not that I know of.
    3. Don’t see the point, but then again I don’t need to hide money. :)

  13. Melissa says:

    I just opened a box at my bank. I was surprised that the teller not only stayed by my side the whole time but he watched as I put my things into my safe deposit box. It felt really uncomfortable. If it happens again, I don’t know if I will keep it.

  14. george3 says:

    How do I keep the inside of my fireproof safe dry (absorbing moisture)?

    Thanks in advance for any input.

  15. lisa says:

    thankyou…it was perfect….now im not so scared to get one…

  16. Anonymous says:

    same thing haapened to me..the teller was looking at all my activities ..which made me feel really uncomfortable. He handled both the keys himself..was that the right thing to do..give my keys to him to open the box !

  17. jerry says:

    please be aware that most homeowners policies will not cover personal property in a safe deposit box unless you have scheduled the property and provided an appraisal. They will never insure cash in the box. Right now you can not buy insurance for the contents. Having said that, a bank SDB is far better than a home safe-did you see the footage of all the safes floating in the ocean in Japan after the tsunami.

  18. Edito says:

    What if you have a business that is not legit and you want to hide your money, are there laws that will prohibit using a safe deposit box to put money away?

    can the bank give the police access to my safe deposit box?

  19. Edito says:

    Let’s say the police already gain access to the safe deposit box and they got around 10 thousand dollars what could happen?

    why would they have searched my safe deposit box?

  20. Shoy says:

    After going in my safety deposit box at bank, upon completion do I lock it with my key after teller locks with his key, or does teller lock with both keys and then return my key to me?

  21. @shoy says:

    try to insist on locking your key after the teller and doing it yourself. insist on privacy when opening the box.


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