Looking for a place to keep your platinum ingots, important documents or precious family heirlooms? A decade ago, you might have gone straight to the bank and opened a safe deposit box. But with virtual finance on the rise—more than half of U.S. adults bank online—it’s becoming less convenient and it makes less sense to travel to a bricks-and-mortar location to store valuables. Are safe deposit boxes still relevant? What are they, when should you use them and what are the alternatives?
Safe deposit boxes explained
Safe deposit boxes are compartments within financial institutions’ vaults where customers can stow important or valuable papers and personal treasures such as birth certificates, government bonds and prized jewelry or precious metals. More secure than ordinary home safes, they protect customers’ valuables from loss, theft and destruction by natural disasters.
Annual rental fees range from $15 to $150 depending on size, according to the Safe Deposit Specialists, a consulting firm in Houston. The boxes can be as small as 2 inches by 5 inches to as large as 10 inches by 10 inches and are usually 22 inches long.
Customers should use safe deposit boxes to store items they won’t need to access immediately, such as property deeds, car titles and U.S. savings bonds, the Federal Deposit Insurance Corp. advises. The FDIC doesn’t insure the contents the way they do with deposited cash, so currency kept this way could be at risk. It’s safer to keep your dollars in a savings account so your funds are covered by the FDIC and earn interest.
Deposit boxes shouldn’t be used to store anything you might need in an emergency, because your access is limited—you can’t get to the box after office hours and on holidays. For example, power of attorney documents, which give family members the right to make financial or health decisions for a loved one, should be kept at home for accessibility anytime.
Alternate options
Safe deposit box use is on the decline, as many of those that exist are empty, the Boston Globe reported in March. Barclays, HSBC Group and other banks have discontinued the service in recent years, according to BBC News in London. So where do you keep essential documents and valuables if you choose to forgo a bank vault?
Many people have turned to home safes for tangible items such as heirloom jewelry and gold ingots. These systems are better than nothing, though not as secure as a bank safe deposit box, the FDIC says. Thieves can break into or carry off a strongbox even if it weighs a few hundred pounds. Rather than take that risk, consumers can scan important paperwork and store the digital copy. But some documents are only legally useful when they carry a signature and a notary’s seal, so the originals still need to be preserved.
Another popular option for documents is a virtual safe deposit box. These are offered through some financial institutions and third-party platforms. Examples include:
- Estate Asset – An online product that lets users upload wills, life insurance policies, passwords and more, and share that information with loved ones.
- My Virtual StrongBox – A free cloud-based service offered through banks, credit unions and wealth management companies to store wills, mortgages, tax documents, family photos and more.
- DataVault – A drop box for online banking, DataVault stores documents online in a secure location and lets banks and customers send copies of things like loan agreements to each other.
Whether you stick with a traditional safe deposit box, store your precious objects in a home safe or vital papers on a personal hard drive, or choose a virtual product for those documents, it’s important to have some method of safeguarding your valuables from theft and destruction. There are more choices today for documents, but for things like heirlooms and platinum, a safe or vault may still be the best option.
Safe deposit box image via Shutterstock.
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