Do You Need a Bank Safe Deposit Box or Locker for Storing Valuables?

It's expensive to maintain a secure vault with safe-deposit boxes and many banks have chosen to stop providing this service. Banks are closing high street branches and doing more of their business online. This means that there are fewer physical locations that these facilities can be offered.

In US, the Bank of America and Chase Bank still offer safe-deposit boxes. The terms and availability of these boxes varies between States. The rental charges are individual to each customer but are usually around US $50 to $100 per annum. Many banks see the provision of safe deposit boxes as a loss leader and only offer the service to customers in good standing.

In England, none of the major high street banks offer safety deposit boxes to new customers. Existing wealthy clients (High Net Worth individuals) are able to retain an old safe-deposit box, but the large banks are not creating any new rentals. There is a small newcomer, the Metro Bank, which offers a safe deposit service in the London area only for a rental charge of around £500 per annum.

A safe-deposit box is somewhere to place objects in a secure environment. Years ago there were no police or other security forces to protect you and your possessions. You had to make your own arrangements to protect them from being stolen or destroyed in a fire. These items could be anything from valuable gold or jewelry, to important documents such as property deeds.

There are now state and federal emergency services to help residents maintain security and douse fires, so the need for a safe deposit box is not as great as before. Safe deposit boxes can be useful for people that need to travel away from home often (for work or other reasons). Using a safe deposit box at a bank is almost always more physically secure than one at home, but it may be less convenient in an emergency.

A safe-deposit box doesn’t have to be in a bank or other financial institution. Some businesses (like jewelers or retailers located in isolated areas) have always had their own safe of the premises. Some individuals also prefer to have their own safety deposit box. However such a safe needs to be large enough and heavy enough so that it cannot be easily removed by a burglar or ram-raider.

A safe-deposit box protects against fire, flood and theft. It is a good place to keep original paper documents that are irreplaceable. This category can include property deeds and birth certificates. Technology means that if you bought your property within last 20 years you may find that paper records are now obsolete in some jurisdictions. For example, if you bought land or property in England and Wales (UK) after 1993, all changes of ownership have been recorded electronically on a central database at The Land Registry and so paper deeds are no longer required to prove ownership.

The other main category of items that should be kept in a safe-deposit box is valuable items with monetary or sentimental value that you would miss if they were stolen. This could include gold, jewels or other family heirlooms.

1. Photograph anything you store in a deposit box. This will help prove ownership if the secure facility is raided.
2. If your bank or deposit-box holder does not ask you to sign a log when you visit the box, ask why.
3. If you die while renting a box, your executor, your heirs, or any joint account holders should be able to access the box. However, they can only do this if they know you renting such a box. Make sure they know of its existence otherwise the rental payments will cease and your property will be "unclaimed".
4. (See point 3 above) When rental fees for the box stop being paid, the bank or provider can claim the contents.

The only people who have access to your safe-deposit box are those whose names are on the rental agreement. You should therefore keep your Will at home as on your death your executors will need a Court Order to gain access to your box.

The secure vault where your safe-deposit box is housed is unlikely to be open 24/7. So keep at home any documents that may need to be produced in an emergency. This would include for example the original document for a Power of Attorney.

Cash should not be kept in a safe-deposit box as their contents are specifically excluded from federal compensation schemes (e.g. US Federal Deposit Insurance Corporation).

As major banks stop providing safety deposit boxes for anyone other than their most favored customers, so private enterprise steps in to fill the gap. In many cities there are now private companies whose only business is to rent out safe-deposit boxes. They are not bound by banking regulations and there is no guarantee about what happens to the contents of your box if the company should fail.

Because of this uncertainty, more and more people are buying a home safe as this can be as secure as placing their valuables with a private company. A home safe needs to be not only secure and fireproof, but also large enough and heavy enough to deter a thief from lifting the whole object into a getaway vehicle. The video below shows how with skill and practice, almost any safe deposit lock combination can be decoded and opened.

The US Federal Deposit Insurance Corporation makes some recommendations to anyone thinking of renting a safe-deposit box in a bank vault. They say do not trust anyone with the key to your box, least of all a bank employee, even for a few seconds. Just a few seconds is all it takes for a petty thief to make a wax impression of your deposit box key. There have been numerous cases over the years of weak or corrupt bank officials who have done this and stolen from clients. As the contents of a safe deposit box are never recorded, then it is impossible for you to prove a theft has occurred.

Carol Mesheske, Chief of a fraud section in the FDIC's Division of Supervision is quoted as saying “Don't allow a bank employee to keep your key and handle transactions for you if you're not there - something elderly customers have done and regretted."

A bank exists to make a profit. Given the scarcity of safe deposit box facilities, you would almost certainly need to open a bank account to access this service. Banks use your need for storage of valuables to try and cross-sell you their other services. Usually you are interviewed about your finances before you can sign a lease for a bank's safe deposit box.