The ins and outs of using a safe deposit box

By Brette Sember

If you want to keep something safe, put it in a bank’s safe deposit box, right? Maybe not. A safe deposit box is a good place to keep some things, but shouldn’t automatically be your go-to solution for storing items of value or importance.

How safe deposit boxes work

A safe deposit box is a locked box that’s located inside a bank’s vault and rented to individuals or companies. The box can be opened only with the renter’s key as well as a key from the bank. Generally, a signature or code is also required to access the box. Some banks are now adding biometric security.

Security and your safe deposit box

Since the box is inside the vault in a bank that’s protected by various security measures, it certainly seems like it should be secure. However, mistakes (or crimes) can put the treasures you stored in a safe deposit box at risk. You might not know that, although these boxes are inside banks, their contents aren’t insured by the FDIC like the money you deposit in the bank, and the bank’s insurance generally won’t cover their contents.

And although some might think that theft of the items they secure in their box is really the only (remote) concern, it’s just one of several possible worries. Thirteen hundred safe deposit boxes were destroyed in the World Trade Center terrorist attacks in New York and 300 boxes in New Orleans were submerged under floodwater resulting from Hurricane Katrina. On the other hand, you at least don’t have to worry about your bank failing—you would still have access to your box the first business day after the FDIC takes control of the bank, should that happen.

What to keep in your box

As a rule, use your safe deposit box to store and protect items that you don’t regularly access. Important original documents like birth certificates, marriage certificates, Social Security cards, deeds, titles, savings bonds, stock certificates, treasured photographs, valuable jewelry that isn’t worn often, or special mementos are all good candidates for the box. But don’t store items that you use often or might suddenly need to access, such as your passport, medical directives, powers of attorney, or even cash. You might want to check with an attorney about the best place to store your original will; different states have different requirements or recommendations.

Accessing your box

Your box belongs only to you but you can bring anyone with you when you access it. If you have a power of attorney, your bank may not allow that person to access your box without you present. Some banks require that the document specifically mention the safe deposit box and grant your attorney-in-fact access to it. Others deny all power of attorney access, so if that is a concern, find out your bank’s rules before you rent a box.

After the death of a safe deposit box’s renter, the contents belong to the estate and individuals who prove legal eligibility can access the box. A death certificate and a will or court order generally must be presented to access the box after death. Some states allow the box’s renter to provide a list of who may access it after their death.

Protecting your valuables

You rent a safe deposit box to keep certain belongings safe, so it’s a good idea to take some steps to further protect what you have placed in the box. Keep an inventory with photographs  of anything you place in the box to document exactly what it contains, in case something happens to it. Talk to your insurance agent about possibly insuring the contents (remember, the bank’s insurance probably doesn’t cover the contents of safe deposit boxes). Keep the key in a safe place where you can be certain you won’t lose it.

A safe deposit box can provide a secure place to store important items, but don’t treat it like a cure-all for your most important storage needs. A little planning and forethought can help you make better decisions on how best to use it.

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