Safe deposit boxes at banks

[SceneIt]

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?

[Skittl1321]

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.

[soxxy]

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.

[cruisin]

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.

[Vash01]

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.

[cruisin]

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.

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.

[pilgrimsoul]

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.

[Vash01]

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.

That's scary.

[cruisin]

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.

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.

[Garden Kitty]

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.

[Skittl1321]

In a situation like that, I would think the bank would be liable for the box's contents.

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

[Skittl1321]

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.

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.

[snoopy]

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.

[cygnus]

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.

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.

[cruisin]

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

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

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.

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.

[PDilemma]

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

[cruisin]

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

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.

[PDilemma]

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.

[cygnus]

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.

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?

[danceronice]

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.