Does My Family Really Need a Safety Deposit Box?
Safety deposit boxes can be an option to store your family's valuable, but do you really need one? Many families wonder if a home safe is just as good and if a safe deposit box at a bank or credit union is really worth the cost.
Let’s look at what safety deposit boxes are, how to sign up for one, what you should and shouldn’t store in a safety deposit box, and how safety deposit boxes compare to other forms of storage, such as home safe or fireproof box.
What is a Safety Deposit Box?
A safety deposit box is a secure storage box in which you can store your valuables. You can rent a safety deposit box at your bank or financial institution. When you rent a safety deposit box, your bank keeps a key to the box, and you keep a key, making the box more secure.
When you want to access your safety deposit box, you have to show a valid form of identification, just as you would if you were accessing your bank account. Generally, safety deposit boxes are reinforced to withstand natural disasters, including fires, floods, and hurricanes. This makes them one of the most secure options for your valuables and important paperwork.
Just like other financial accounts, you can assign a co-lessor to your box if they also need access to the assets or as an emergency contingency in case something were to happen to you. For many families this will include your spouse, but you have the ability to include anyone you wish such as other adult family members.
Does my Family Need a Safe Deposit Box at the Bank?
If you have valuables, then a safe deposit box is worth considering. Despite what we see in movies and TV, bank heists are very rare. That means your family's valuables are protected by the same measures the bank is using to protect their assets. That same level of protection is almost impossible to replicate at home.
How to Sign Up for Your First Safety Deposit Box
The process for signing up for a safety deposit box is different at every financial institution, but it’s similar to opening up a bank account.
- First, go to your bank and provide all the relevant paperwork, including your identification. Some banks will ask for more than one form of ID.
- Then, choose what size of safety deposit box is right for you. Most banks have different sizes that can range from about a foot long to almost two feet long.
- Determine the cost of the safe deposit box. This can range from $30-40 a year up to a few hundred dollars per year.
- Lastly, create the terms and access for your box. Will you have a co-lessor? How often will you need to access the box? You may also want to start a checklist of everything you’ll keep in your safety deposit box.
What Should You Put in a Safety Deposit Box?
Although safety deposit boxes are generally very safe, there are some precautions you should take when storing items. Be smart about storing important documents and valuables, even if the deposit box is at a bank.
When storing important documents, such as wills, trusts, birth certificates, or marriage licenses, never store the only copy in a safety deposit box. It's important to maintain multiple copies. Separately, you should also have a securely stored digital copy.
When storing valuables like jewelry or gold, take inventory of what you’re storing so you know exactly what’s in your safety deposit box. Share this information with your spouse. You may also want to take photos of your items in the safety deposit box so you have proof of their placement in case anything happens.
What Should Not Be In a Safety Deposit Box?
All banks have an agreement for their safe deposit boxes. Part of this agreement includes items they do not allow. Every bank is different, but this often includes firearms, liquids, or anything deemed dangerous.
Cash is also not allowed. Why? The bank wants you to deposit cash in an account. Also, FDIC protection does not cover cash in a safe deposit box, even if it's at a bank. Check the bank's agreement before you sign up to ensure the items you plan to store are within the rules.
Generally, if there's something you could need quick access to, then another safe location might be best. Remember there's no safe deposit box that has Saturday night access, even in an emergency.
How to Get Into Your Safe Deposit Box
Your financial institution will give you a key. When you want to access your box, you'll use your key along with the bank's key to open the box. The bank will provide a private area where you'll access to view, add, or remove contents from your box. When you're finished, the bank representative will again lock your box with your key and the bank's key. Anytime you access your box, the bank will ask for identification and will also record the visit on their books.
Safety Deposit Boxes vs. Home Safes
For many items, safety deposit boxes are more secure than home safes because safety deposit boxes are more secure, thanks to the bank’s heavily protected vaults. Plus, they are fire and flood safe while many home safes aren’t. That being said, some items are better kept at home so you can easily access them when needed.
Safety deposit boxes are a great option for storing important valuables and paperwork because they are more secure in a bank or financial institution. If you have more questions about storing your assets safely, contact a financial professional.
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