Safe deposit boxes at banks

Discussion in 'Off The Beaten Track' started by SceneIt, Nov 20, 2011.

  1. SceneIt

    SceneIt DoneIt

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    This is an odd question, I know. I have some money stashed away in a safe deposit box at my bank. I've only made one deposit, it's my life savings actually. I don't want to invest because my SIMPLE plan at work has actually lost money in recent quarters. I will be retirement age in about 15 years or so.

    Is your stuff really safe in these boxes? I'm afraid to go check on it, I don't know why.

    Has anyone ever heard of money disappearing from these boxes? Nobody has the key but me. I do have a daughter on the record as having access to it, but she has no idea about the box.

    Am I just being paranoid?
     
  2. Skittl1321

    Skittl1321 Well-Known Member

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    I have never heard about things being stolen from anyone's box, except high profile bank heists. However when we had floods the bank sent notices to remove contents or they would be ruined.

    They are not (afaik) federally insured however. Your money would be safer if a savings account with fdic.protection. for every 250k, create an account at a new bank, as that is the maximum amount insured.
     
  3. soxxy

    soxxy Guest

    Right. The contents of a safe deposit box are not FDIC insured. Check the contract you signed with the bank when you rented it to see if it covers anything.
     
  4. cruisin

    cruisin Well-Known Member

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    I have never heard of safe deposit boxes being unsafe. But as has been said, they are not insured for water or fire damage. I suppose a bank could be robbed, but the bank doesn't have the 2nd key to open safe deposit boxes, so it is unlikely (though not impossible) for them to be robbed.

    If you are concerned about losing money, and you don't seem to be worried about this particular sum of money earning interest. CDs and Money Market accounts earn a bit more interest than savings accounts and the principal is safe and they are FDIC insured. Just make sure you are within the FDIC insurance limits in any given bank. If you exceed the limit in one bank, use another bank. Spread the deposits out to extend insurance coverage. The only drawback to CDs is that there are penalties for taking out the money before they come to term. But, that can also be a good thing, if you want to make sure you don't impulse spend.
     
    Last edited: Nov 20, 2011
  5. Vash01

    Vash01 Fan of Julia, Elena, Anna, Liza, and Vera

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    I agree with the rest of the posters. Safety deposit boxes are safe, but you may be better off investing the money in CDs so that there is no risk and you earn some interest.

    For me the biggest benefit of the safety deposit box has been for storing important documents and some valuables and sentimental items. If I keep them at home, there is a chance they could be misplaced and I would spend a lot of time looking for them. I would not use safety deposit box for storing cash; not because it's unsafe but because there is a better way of taking care of the cash.
     
  6. cruisin

    cruisin Well-Known Member

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    I agree, though I do keep $1,000 in cash in the safe deposit box, just for an emergency. I don't know why, I could put it in my MM and get it out just as easily. But, my Dad always did that, so I suppose that's why. :)
     
  7. pilgrimsoul

    pilgrimsoul Active Member

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    I think your concern is justified because bank employees are human and make mistakes. Boxes are sometimes drilled & the contents confiscated in error. This happened to a friend of mine several years ago. She had her mom's heirloom jewelry stored in her box & the bank drilled her box and sold all the jewelry. She was not notified until after the jewelry had been sold & there was no chance of ever getting it back.

    The kicker was that it was all the result of a simple clerical error. Her box rental fees were in fact current, but the bank drilled the wrong box.
     
  8. Vash01

    Vash01 Fan of Julia, Elena, Anna, Liza, and Vera

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    That's scary.
     
  9. cruisin

    cruisin Well-Known Member

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    In a situation like that, I would think the bank would be liable for the box's contents. Not being insured for acts of nature or fire is one thing, but bank error is another. It is important that you photograph your jewelry, and have a record of it.
     
  10. Garden Kitty

    Garden Kitty Tranquillo

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    I would think that under no circumstances should you have your life savings in any one place or investment. And I certainly wouldn't keep more than "emergency" cash in a safe deposit box. I'd invest it in a CD or other insured account and probably split it between at least two banks (depending on the amount).

    Remember that there is more risk than just investment risk. If you leave the cash uninvested, you're going to find the real value of your money diminishing due to inflation.
     
  11. Skittl1321

    Skittl1321 Well-Known Member

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    Liable for the contents means the person would get a payout. That doesn't bring back the jewerly that had special meaning.
     
  12. Skittl1321

    Skittl1321 Well-Known Member

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    I agree.

    And I've heard some people who prefer cash because they don't trust the system, and don't the FDIC could actually recover their cash if there was a true crash. But if something like that happens and the FDIC really does fail, those pretty pieces of paper are likely to be completely worthless anyway.
     
  13. snoopy

    snoopy Team St. Petersburg

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    If you do keep money in a Safe Deposit box, keep a detailed log of it in some way. If it is lost - even by bank error, it would be hard to prove it was ever there in the first place. Most bank's don't keep records of what is in those boxes. It would just be your word without some other corroborating evidence. Money claims are hard to prove.

    Really, I think you are better off in a savings account. If you are worried about the health of the FDIC, research the financial condition of your bank. PM me and I can show you how to do this. Or put it in a Fidelity Money Market. Fidelity isn't going anywhere.
     
  14. cygnus

    cygnus Liberal Furry

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    NO bank keeps a record of what is in the boxes. They can't because they don't know what the client puts in there. It takes two separate keys to open a SDB- a master kept by the bank and a key kept by the client (usually they get two copies of the key). The bank cannot open the box without the client's key. If the client loses both of her keys it must be drilled by a locksmith and the lock is changed. If the client does not pay the rental fee after a certain amount of time it must be drilled by a locksmith to access the contents. If there is anything of value the bank may sell the contents to recoup the fees, and the rest must be sent (after a certain amount of time, usually 7 years with no client contact) to the Bank of Canada (in Canada- not sure if countries have similar laws), from which it may be claimed back by the client after a lot of paperwork.
     
  15. cruisin

    cruisin Well-Known Member

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    That is true. But compensation would, at least, help.

    You're right, in that the bank has no right to know what you put in a safe deposit box. However, if they mistakenly drill, open, and sell what is in one, they know what they confiscated/sold. They should be made to produce receipts for the sale of what was in the box. But, they should be forced to compensate the appraised value of any jewelry chart was in there.
     
  16. PDilemma

    PDilemma Well-Known Member

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    Do your heirs a favor and do not leave them piles of cash to deal with. :slinkaway
     
  17. cruisin

    cruisin Well-Known Member

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    Actually, having just probated my mother's will, cash would have been so much easier. Especially, since her safe deposit box was owned jointly by me. I could have divided it all equally and not have had to deal with her assets being frozen due to a "class C" inheritor (my mother's sister). I could have given my aunt her inheritance right away, instead of having to wait months for a tax waiver.

    I would say, do your heirs a favor and make sure that all of your assets are owned jointly by a (hoped for) survivor. My father's assets were jointly owned by him and me. When he passed, his will was very easy to probate and execute. I had access to everything, without the state getting involved.
     
    Last edited: Nov 22, 2011
  18. PDilemma

    PDilemma Well-Known Member

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    Experience speaking. Won't say more as it is a private family matter. I stand by it, though, do not leave massive amounts of cash.
     
  19. cygnus

    cygnus Liberal Furry

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    Oh, I agree with you, and knowing the lengthy and complicated procedures that have to be gone through to drill a box, I'm a bit surprised that such a thing could happen. Maybe the US banking regulations that govern such things (I'm assuming this happened in the US) are far looser than the ones in Canada and other countries?
     
  20. danceronice

    danceronice Corgi Wrangler

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    How about "have a will detailing how everything, cash or otherwise, is to be divided, supervised by a non-related executor?"

    And I agree with everyone else, a safe-deposit box is unlikely to be robbed, but you're wasting your money. Put it in CDs and money markets if you don't trust higher-risk investments or don't think an IRA is worth it at this point. A ten- or fifteen-year CD will earn you a tidy pile of interest.
     
  21. MacMadame

    MacMadame Cat Lady-in-Training

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    It's because they drilled the wrong box. They probably did go through a bunch of steps... for the correct box.
     
  22. Skittl1321

    Skittl1321 Well-Known Member

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    Eh, not really. Rates are utter crap right now...

    But still a MUCH better idea then letting it sit in a deposit box.
     
  23. Garden Kitty

    Garden Kitty Tranquillo

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    I wouldn't put it all in one CD. I'd try to split the money and build a CD ladder, putting an equal portion into a new CD over a series of years or at least 6 months. This allows you to diversify the interest risk, and gives you cash that is always coming due so you don't need to break a cd if you need cash. It would also give you a chance to split the money among a few banks if you want to diversify your investment risk even further.

    Until invested in cd's, I'd keep the rest in an insured savings account(s) and make sure you're below the insured limit.
     
  24. numbers123

    numbers123 Well-Known Member

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    15 years is a long time in investment history.

    I was extremely distraught over my 401 accounts about 24 months ago as it had dropped to 2/3's of its original deposit. I asked for a new financial planner, we restored the amount to the original deposit and it has stayed fairly stable even given the downturn of the market in the past months. And that is in spite of paying management fees. I am on a medium risk plan and planning on "real retirement" in 7 years (I am currently and plan to continue to be a stay at home grandma).

    I echo everyone's concern about keeping it in cash.
     
    PeterG and (deleted member) like this.
  25. danceronice

    danceronice Corgi Wrangler

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    It would get you a lot more than a savings or checking account and obviously ANYTHING is more than what you get in a safe-deposit box. Heck, buying gold would be a more productive use.

    I wouldn't do it, but I'm in higher risk and longer term stuff.
     
  26. cruisin

    cruisin Well-Known Member

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    There is no reason not to have a related executor. A will is a will and must be enforced to the letter. When someone passes, the executor doesn't have the option to carry out the parts of the will they choose. A will MUST be probated. That means that you must bring it to the courthouse (in the county the person lived in), along with an official death certificate. The court, then, issues the executor a letter of surrogacy. Only then can a will be executed. The court, also, expects copies of each beneficiary's letter advising of the will's probate, and a copy of each beneficiary's refunding bond. The refunding bond is a signed letter acknowledging receipt of the inheritance. All beneficiaries must receive their inheritance within one year of probate (unless there is some documented, legitimate reason that the money/property cannot be distributed within that time frame). So, it would be very difficult for a will to be manipulated.

    I executed both of my parent's wills. It is not a job anyone wants. It is painful, and exhausting.

    I would add that "one up" CDs are a good option. They allow you to "up" the interest rate one time (during the term of the CD) if the rates go up.
     
  27. danceronice

    danceronice Corgi Wrangler

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    My point being if there IS going to be complaining, appoint a nonrelated non-heir because they have no dogs in the fight and it will hopefully, though not always, get the complainers to shut up. It at least takes away the "mom/dad/whoever liked you best" argument. (And means the executor can walk away at the end and not have to listen to the bitching once everything's done.)
     
  28. cruisin

    cruisin Well-Known Member

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    Ah, in my case, my brother and I were named co-executors. Since both of my parents lived in the same county I do (they were divorced), and my brother lives an hour and a half away. He relinquished his executorship. He didn't want to deal with having to travel to handle the responsibilities - court, selling the house, gavin to co-sign things. But, we are lucky, in that, he trusts me and I am neurotically fair. We did have one of my husband's partners (my husband doesn't handle estates) go over each will with us. But, I did 98% of the work. The lawyer only handled the official paperwork, letters, etc. As far as who liked who best? My parents loved us both equally, but my Dad and I got along better and my brother and my Mom got along better. Normal, I think :).
     
  29. sk8pics

    sk8pics Well-Known Member

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    I'm the executor for a married couple who are friends of mine, for just this reason. My friend said she knew I wouldn't put up with any crap from her family. :lol: But I do hope I never have to honor this agreement....
     
  30. antmanb

    antmanb Well-Known Member

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    What's a CD?