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Sometimes, you may have items you prefer to keep in a secure location so they aren’t lost or damaged. In these cases, you might want to use a safe deposit box.
These boxes aren’t as popular as they used to be due to digital storage and home safes. However, some banks still offer them. We’ll cover what safe deposit boxes are, as well as the items you should — and shouldn’t — keep in them.
A safe deposit box is a protected container, typically made of metal, inside a bank or credit union. It is usually inside a vault or safe, where it is well protected. Banks and credit unions often have state-of-the-art security measures such as video cameras and alarms to prevent unauthorized access to their vaults and the contents inside.
You might rent a safe deposit box to keep important items out of harm’s way. This could include medical or legal documents, small collectibles, or family heirlooms. You receive a key to access the deposit box, though some banks use biometrics. You often need to provide an ID to access it as well.
Banks often keep a separate “guard key” to access the deposit box if necessary. However, banks will only access the safe deposit box in certain circumstances. For instance, they may open it if a search warrant or court order requires accessing the box. They may also open it if you stop paying rent for the box, as it will be considered abandoned.
Generally, safe deposit boxes are a secure place to keep important items — hence the name. However, there are certain items you should keep in a safe deposit box, and some you should store elsewhere.
Generally, you should keep items in a safe deposit box that would be hard to replace. Safe deposit boxes can still be vulnerable to damage from fires and floods, but using one is typically safer than keeping important documents unprotected at home.
While many things have gone digital, such as bank accounts and investment statements, you may still have physical documents that must be kept safe. This is where a safe deposit box comes in handy.
Keep in mind that most safe deposit boxes are no larger than 10.5 inches x 10.5 inches x 21 inches. This means they are a good place to store small items, but you’ll need to find alternatives for larger items. Below are some items ideal for storing in a safe deposit box.
Personal documents such as birth certificates, marriage licenses, adoption papers, and citizenship paperwork are perfect for keeping in a safe deposit box. These are important items that easily fit in a small storage box. However, they aren’t something you are likely to need every day or on a moment’s notice. This makes a safe deposit place a great place to keep them.
School transcripts and diplomas
These documents generally meet the same criteria as those in the previous section. They are generally small, important documents you won’t need to access urgently. Still, you may need them in some situations, such as when applying for a job.
You generally receive the deed after paying off your mortgage. The deed shows that you legally own your home, so it is very important. A safe deposit box is a good place to keep the deed to your house. You will need the deed if you decide to sell your house, and the safe deposit box ensures you can access the document when the time comes.
A car title is similar to a house deed, as it shows you are the legal owner of any vehicles in your possession. Again, if you decide to sell your car, you will need the title to transfer to the new owner. You will also need the title when registering vehicles with the state or ordering new license plates. It’s important to keep these documents in a safe place so you can access them when needed.
Paper stock and bond certificates
You can also keep paper stock or bond certificates in a safe deposit box, though most are issued electronically these days, including U.S. savings bonds. Still, if you have any old paper stocks or bonds lying around, a safe deposit box is an ideal place to keep them.
Some items shouldn’t be kept in a safe deposit box, even if they are important. As mentioned, larger items or those you may need to access in a pinch should generally be left out. If you have any of the following items, it may be best to avoid keeping them in a safe deposit box.
Cash may be valuable, but a safe deposit box isn’t the best place to keep it. One reason is that cash stored in these boxes is not insured by the FDIC. If anything happens to the cash, you may have little recourse in recovering it.
In addition, cash sitting in a safe deposit box won’t earn interest. As a result, physical cash will inevitably lose purchasing power over time due to inflation. It’s often better to keep cash in a high-yield savings account, as you can easily access your money, and these accounts earn interest.
Read more: How to protect your savings against inflation
You may not use your passport daily, but there could be situations where you need access to it quickly. Remember, banks generally aren’t open on weekends or federal holidays. If you keep your passport in a safe deposit box, you won’t be able to retrieve it on any of these days. It’s better to keep it in a safe place at home, such as a safe.
Read more: Which banks are open on Sunday?
Since there could be situations where you need urgent access to your estate planning documents, it’s best to leave them out of a safe deposit box. Keeping extra copies of these documents in a safe deposit box is acceptable. But if you only have one, you may be unable to access them quickly if they’re in a safe deposit box. Consider leaving those documents out of the safe deposit box and perhaps making copies of them.
Hopefully, the reasons you shouldn’t keep anything illegal in a safe deposit box are self-explanatory. But just in case, remember that authorized bank or credit union employees typically have access to open safe deposit boxes in certain circumstances. If you wouldn’t want employees to discover anything questionable in your safe deposit box, you shouldn’t store it there.