Is A Safe Deposit Box Actually Safe?
Original homeowner documents. Significant legal correspondence. Your great-great-grandfather’s farm deed. Your parents’ original marriage license. We all have items that are important to us or have great sentimental value. But where should we stash them so that they’re protected and not mistakenly thrown away, snatched during a burglary, or, even worse, destroyed in a house fire?
Bank safe deposit boxes offer a relatively safe alternative to keeping important papers or cherished items at home. According to the Federal Deposit Insurance Corporation (FDIC), following a few key guidelines can help ensure that keeping a safe deposit box at your bank is worth the fee, while also providing you with freedom from worry.
What’s inside matters
The FDIC recommends keeping items, such as originals of key documents, including birth certificates, property deeds, car titles, and U.S. Savings Bonds, in a safe deposit box. You might also want to consider putting family keepsakes, valuable collections, irreplaceable photos, and photos or videos of your home’s contents for insurance purposes in the box. Check with an attorney regarding whether or not you should store originals of your will in a safe deposit box, as laws vary from state to state. A good rule of thumb: Keep anything you might need to access quickly, such as a passport or “powers of attorney” close at hand and not in a bank safe deposit box.
Stash cash in a savings account or certificate of deposit
The FDIC only insures deposits in deposit accounts at insured institutions, and only in the rare instance that a bank fails. A safe deposit box is not a deposit account, which means that any of the box contents, including cash, checks, or other valuables, are not covered if they’re damaged or stolen. In addition, financial institutions generally don’t insure the contents of safe deposit boxes.
Even a safe deposit box can be damaged
A bank, and a safe deposit box inside a bank, aren’t completely protected from theft, fire, flood, or other loss or damage. You can protect items in a safe deposit box from water damage by placing them in water-safe, zippered plastic bags or containers. It’s also wise to refrain from listing identifying information on or near your safe deposit box key, such as the box number and bank name, in case the key is lost or stolen.
Consider giving only key people access
You can jointly rent a safe deposit box with one or more people, and allow them unrestricted access to the box. However, the bank would most likely not be responsible for anything that authorized individuals remove from the box without your permission. As for who has access to your safe deposit box if you die, FDIC counsel Richard Schwartz notes that rules restricting safe deposit box entry vary according to state law.
All of this said, a safe deposit box is a fairly low-cost solution for storing valued possessions and documents. Just be sure to follow the aforementioned guidelines, and you should be able to benefit from having one, as opposed to keeping your prized possessions under your mattress, or in a floorboard in your home.