Safe deposit boxes: How they work and what to store

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An expert says safe deposit boxes are best for important financial documents or valuable assets like family heirlooms.

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• If you need a place to store valuables, banks have safe deposit boxes at branches for a fee. 
• Bank safe deposit boxes may be ideal for heirlooms or documents you don't want to store at home.
• Consider extending permission to someone you trust, and make sure to review your box routinely.

Safe deposit boxes are one of the first resources people turn to when looking for a place to safely store valuables. Banks offer safe deposit boxes at branch locations if you'd prefer to keep your safe deposit box in a vault away from your home.

Before you open a safe deposit box, though, you'll want to create a plan that ensures you are keeping your belongings in the right place and managing them appropriately. 

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How do you open a safe deposit box at a bank?

First, contact a local branch to see if any safe deposit boxes are available.

Once you've narrowed down the place where you'd like to rent out a safe deposit box, you'll fill out a rental agreement form. The rental agreement form will outline what you can or can't keep inside a safe deposit box, whether you may add renters after you rent a box, and what the bank is liable for in the event something happens to your belongings.

After reading through the agreement, verifying your identity, and paying any rental fees, you'll get your keys and have access to your safe deposit box to put in your personal belongings.

If you need to check your belongings in the future, you have to set an appointment beforehand.

Quick tip: If the process of renting out a safe deposit box seems too inconvenient, you may instead buy a safe deposit box and store it in your home. However, you'll likely need homeowner's insurance to protect your valuables since homes aren't as secure from theft or natural disasters as banks.

How much does a safety deposit box cost at a bank?

A small 3-by-5-inch safe deposit box is usually around $10 to $60 per year. A large safety deposit box that's 10 inches by 10 inches might be $50 to $165 each year. Some financial institutions may also allow you to pay monthly or annually.

What should you keep in a safe deposit box? 

James J. Burns, CFP® professional and president and founder of JJ Burns & Company says a safe deposit box might be ideal if you're storing important papers such as contracts or valuable assets like family heirlooms or expensive jewelry.

Burns adds you should never keep cash or a will inside of a safe deposit box. If you plan to save money, it's better to keep it in a savings account or invest it. Burns also warns that safe deposit boxes aren't a great place for a will because it isn't easily accessible, so it'd be better to store a copy instead of the official document. 

Quick tip: Keep in mind valuables kept at a bank are not FDIC-insured. When a bank says it's FDIC insured, it means money deposited in a bank account is insured if a bank shuts down. A bank could be liable for the value of the content inside your box if you file a claim, though. Read your agreement for specific details.

Advice for managing a safe deposit box

Burns recommends taking time to develop a concrete plan to solidify what you want to store in your safe deposit box, why you want to store it at a bank, and for how long. If you are considering giving a key to a family member or partner: "Make sure you give permission to someone you trust," says Burns.

Once you extend permission to someone, they also have access to your valuables. This might be important to consider if you plan to keep a safe deposit box for your entire life. If you grant permission to another person you'll know that someone still has access to your valuables after you die.

Last but not least, Burns says you'll want to review your safe deposit box annually to ensure your valuables are secure and well-kept.

Safe deposit box FAQs

Is it smart to put money in a safe deposit box?

Experts do not recommend keeping cash in a safe deposit box. A safe deposit box at a bank is best used for heirlooms or documents you do not want to keep at home.

What are the disadvantages of using a safe deposit box?

One disadvantage to using a safe deposit box at a bank is that it isn't easily accessible. If you need to review the content in a safe deposit box, you'll have to schedule an appointment at a bank. Another thing to keep in mind is banks usually have limited liability over the contents stored. 

What items should not be stored in a safe deposit box?

You shouldn't store cash or any valuables that you need to access frequently. It also isn't recommended to keep a will in a safe deposit box. However, you may keep a copy of a will. 

Are safe deposit boxes safe if a bank fails?

Safe deposit boxes are not protected by federal insurance if a bank fails, and the bank usually has limited liability if your valuables are lost or stolen. That said, you may still be able to get the contents of your safe deposit box. You may contact the FDIC or the bank that acquired the failed bank's assets to see if they have your property. After 18 months, unclaimed safe deposit boxes are transferred to the state. 

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