You put your money in a bank.
You put your food in a refrigerator.
You put your clothes in a closet.
Where do you put your jewelry, your rare stamps or coins, or your important papers?
These items belong in a safe deposit box.
A safe deposit box is a miniature safe-like box inside a bank. These boxes are vaulted and sealed for the ultimate safety and protection of your items.
Here are 5 pros and 5 cons to storing valuables in a safe deposit box…
Reasons To Use A Safe Deposit Box
#1 Your items are protected from fire, flood or other natural disasters at home.
Natural disasters can destroy much more than the house itself. They destroy memories like photographs, jewelry, birth certificates, and other important records. You can keep your most valued possessions, copies of your important papers, and even your photographs in digital form in a safe deposit box away from the house.
#2 It’s a cost-effective way to keep valuables private and safe.
Only you know what’s inside your safe deposit box. The cost for a safe deposit box varies depending on size. Rental fees are charged annually.
The smallest box is 2"x5" and 12 inches long. Rent is typically between $15 and $25 a year.
A medium safe deposit box measures 4"x10" and is 12 inches long. The annual rental fee typically falls between $40 and $65.
The largest safe deposit box offered is 15"x22" and 12 inches long. Rent is usually between $185 and $500.
#3 Your items are protected from theft at home.
Your valuables can’t be stolen from your home if they are not there. A safe deposit box is a great way to give you that extra peace of mind — just in case your home is ever burglarized.
#4 Your items are protected from being lost or misplaced.
If you are the type to misplace papers and other items, you might benefit from using a safe deposit box instead of trying to keep things organized at home.
#5 Your family members will know where to find your important papers.
If you have a copy of something important (like your will or insurance papers) in a safe deposit box, your family members will be able to retrieve those items if you, personally, cannot.
If you rent the box only in your name, you, a power-of-attorney or agent you designate are the only ones who can get into the locked box. A safe-deposit box rented jointly with a spouse, child or friend means those people also have access. Experts say it’s wise to have a designated power of attorney to handle your financial affairs — including access to your box — in case you are unable to because you are disabled or traveling, among other reasons. If you have a power of attorney, getting into your safe-deposit box won’t be a problem. Source
Of course, safe deposit boxes are not without their issues…
Downsides Of Safe Deposit Boxes
#1 A safe deposit box can only hold so many items.
Safe deposit box sizes start at 3”x5” and are as big as 15”x15”. There are definitely size limitations as to what you can put inside a safe deposit box. You are mostly limited to jewelry, papers, and other small items.
#2 You must keep track of the key.
If you are someone who often loses or misplaces keys, you will need to take special care to not lose the safe deposit box key! If you do lose the key, you will have to pay the bank for special locksmith services. That fee can be very high. As a precaution, make a copy of your safe deposit box key and keep both keys apart from each other and in safe places. (Not with your house keys or car keys.) Don’t keep the keys on a keyring or in an envelope with the bank’s name or the location of your box. Give your extra key only to someone you trust.
Key deposits are usually $10 to $25 per month. Replacement key fees are typically $20. If both keys are lost, and the box must be drilled open, expect to pay at least $150. Source
#3 You do not have 24/7 access to your safe deposit box.
Safe deposit boxes are located inside banks which have limited hours. Also, if the owner of the safe deposit box is deceased, then the box may be sealed for weeks with important documents inside of it. It’s best to store the original documents elsewhere and use the safe deposit box as a place to keep back-up copies.
#4 Items can still get damaged in a safe deposit box.
While safe deposit boxes are "resistant" to fire, flood, heat, earthquakes, hurricanes, explosions and other disastrous conditions, there is no guarantee that your items will not get damaged. It is wise to put your valuables into a waterproof container before putting them in your safe deposit box for added protection. Also, put your name on each item and take photos of your most prized items left inside the box. That way, if a disaster occurs your chances of successfully recovering an item would be increased.
#5 Items can still be stolen from a safe deposit box.
Safe deposit boxes do get robbed, but this is rare. Thanks to alarms, cameras, motion- and heat-detectors, the items in your safe deposit box are much safer there than in your home. Still, if items are stolen, you may not be able to recoup the loss. It is wise to add a homeowners or renters insurance rider to cover the items in your safe deposit box.
Should you be involved in a discrepancy with the Internal Revenue Service, your box contents can be frozen and you will not be able to access the contents until the dispute has been settled. If the bank suspects your box is involved with any suspicious activity, a court order can be issued and the Department of Homeland Security can be given access to your safe deposit box.
Items To Keep In A Safe Deposit Box
Following are the most important things that you should keep in a safe deposit box:
◾Copy of your will (depends on the state you live in)
◾Copy of insurance policies
◾Titles to your house and cars
◾Detailed list of bank and brokerage accounts, CDs and credit cards
◾Marriage license / Divorce decree
◾Expensive, rarely-worn jewelry
◾Stock and bond certificates
So, what should not be stored in a safe deposit box?
Anything you might need in an emergency, in case your bank is closed for the night, the weekend or a holiday. Possible examples: originals of a "power of attorney" (your written authorization for another person to transact business on your behalf), passports (in case of an emergency trip), medical-care directives if you become ill and incapacitated, and funeral or burial instructions you make. Consider giving the originals to your attorney, and making copies to go in your safe deposit box or to give a close friend or relative. Source
The rule of thumb when deciding what to put into a safe-deposit box is if the following statement applies to the item: "If these documents were lost, I’m in big trouble now." Some people may be reluctant to put items into their boxes because of privacy concerns. But such fears are unfounded, as liability concerns keep banks from prying into safe-deposit contents. Source
In the end, I really do recommend that you use a safe deposit box for your valuables and important papers. The caveats are to take care of the key, waterproof your items, and only store copies of your papers inside the safe deposit box.