Safe Deposit Box

A safe deposit box (or safety deposit box) is an individually secured container—usually a metal box—that lives in the vault of a federally insured bank or credit union. It’s one of a number of services beyond banking that your institution may offer. Safe deposit boxes are used to keep valuables, important documents, and sentimental keepsakes protected. Customers rely on the security of the building and vault to safeguard their contents.

When you rent a safe deposit box, the bank gives you a key to use, in tandem with a second “guard key” held by a bank employee, to access the box (if your bank uses a keyless system, you’ll scan your finger or hand instead). Either way, you’ll have to provide some type of identification—and your key, if it’s not a keyless system—every time you visit the bank to access the box.

The contents of a safe deposit box are not insured in the same way as bank or credit union deposits. The Federal Deposit Insurance Corporation insures cash deposits up to a certain limit but, due to the fact that there is no way to verify the contents of a safe deposit box, banks will not insure their contents. Also, if heirs are not told about the location of the drawer, upon non-payment the box is considered abandoned, and its contents are turned over to the state’s unclaimed-property offices for auction.

You can rent a box in your name only, or you can add other people to the lease. If you opt for co-lessors, they will have equal access and rights to the contents of the box, so think carefully about whom you’re adding. For example, people who have any addiction, financial, marriage, and/or judgment issues may not be ideal candidates—even if they’re family and you love them. Some institutions will allow you to set up access so that both (or all) lessors must be present to open it, but this sort of arrangement is neither smart nor practical. Instead, experts recommend designating someone with power of attorney who can access your safe deposit box in case you can’t.

Before you rent a safe deposit box, it’s important to ask what the institution’s process is in case of death. If you alone rent the box, it will be sealed when you die, and it could be weeks or months before it’s opened. An executor whom you designated to handle your estate after you die would eventually get access to your safe-deposit box, but how quickly depends on the state and the bank.

Safe deposit boxes are undoubtedly more secure than most people’s homes. Bank vaults, of course, are harder to break into and are located in secure areas with alarms, video cameras, and top-notch locks. They’re also reinforced to withstand fire, floods, hurricanes, tornadoes, and other natural disasters. Still, that doesn’t mean you should put just anything in there. Here are tips to help you decide what to keep in—and keep out of—a safe deposit box.

Safe deposit boxes are a good place to keep your hard-to-replace documents—such as contracts and business papers, military discharge papers, and physical stock and bond certificates—along with small collectibles and family heirlooms. Keep in mind that the largest safe deposit boxes are usually just 10 inches by 10 inches and two feet deep, which leaves plenty of room for irreplaceable photos and Grandma’s wedding ring but not your antique doll collection.

Good things to store in your safe deposit box are important items that you won’t need frequent access to, including:

• Personal papers, such as original birth certificates, adoption papers, marriage licenses, and citizenship papers
• Copies—but not the only copies—of wills and powers of attorney
• Military records and discharge papers (e.g., DD 214s)
• School transcripts and diplomas
• Sensitive documents you wouldn’t want roommates, children, relatives, and visitors to stumble across
• The deed to your house, along with any car titles
• Paper stock and bond certificates (including U.S. savings bonds), if you have any (most are issued electronically these days)
• An inventory of your home’s contents in case you need to file a claim with your homeowner’s insurance policy
• Important business papers and records
• Important contracts
• Hard drives and flash drives with backups and important data
• Financially and/or sentimentally valuable jewelry, collectibles (such as coin or stamp collections), and family keepsakes
• Other documents or small items that would be difficult or impossible to replace

Even though safe deposit boxes are designed to withstand natural disasters, it’s a good idea to put anything that could be damaged by water into a waterproof container, such as a zippered plastic bag, to add another layer of protection (this can also help you keep your safe deposit box more organized). And before stashing those important papers and photos, make copies to store electronically on your computer or in the cloud. Just be sure your family knows how to access them.

You can generally access your safe deposit box only during banking hours, which means not on holidays or, depending on the bank, weekends. Thus, it’s best to store items that you won’t need in an emergency. Passports, medical directives, the only copies of wills and powers of attorney, and other documents that you may suddenly need are better kept in a secure spot at home, such as a fireproof home safe that’s bolted to the floor or wall.

You’re better off keeping these items out of your safe deposit box:

• Passports. Even if you’re not a frequent international traveler, you never know when you’ll need your passport for business, a spontaneous trip, or to help a relative or friend overseas.
• The only copies of living wills, advanced medical directives, and durable powers of attorney. These are of little value if they are hidden away in a safe deposit box that no one can access. Tell your loved ones about the arrangements you’ve made and where they can find the documents.
• The only copy of your will. This is especially true if you haven’t designated a cosigner to your safe deposit box. If you pass away or become incapacitated, it can be difficult for your loved ones to access your safe deposit box, and, therefore, the only copy of your will. It’s better to keep wills, living wills, medical directives, and powers of attorney in a secure place at home (such as that fireproof home safe) and tell a trusted relative or friend where they are and how to access them. (Also helpful: Give your medical proxy and the person who has your power of attorney copies of relevant documents.)

While safe deposit boxes have been offered by banks for about 150 years—with various other types of safekeeping offered long before that—fewer people today are renting safe deposit boxes, opting instead for digital storage and home safes. This can make it easier to find an available box—or more difficult if your bank no longer offers them. Betty Riess, a Bank of America spokeswoman, said demand for boxes has dropped “significantly,” especially among younger customers, who are more likely to rely on digital storage. According to Riess, fewer than half of her company’s safe deposit boxes are rented.

Still, safe deposit boxes can be helpful, especially if you aren’t comfortable with the digital storage environment. Some banks offer the boxes for free if you have a certain type of account or a certain balance with the bank. If you’re interested in renting a box, start with your local bank or credit union. If it doesn’t offer the service, ask its representative if he or she knows who does or look online to learn about the options in your area.