Safe deposit boxes are available at many banks for a fee. They help you protect important documents, small valuables and keepsakes, but they also have a downside. Are they worth it? Here are some facts!
Advantages
Safe deposit boxes generally are secure. Most safe deposit boxes have two keys, one you keep, and one the bank retains. Both keys are required to unlock the box. Foreignborn.com has a great article that notes if you want to grant another access to your box, that individual will have to become a joint renter or a deputy/agent. This is different from a power of attorney which will not allow access to a safe deposit box. Safe deposit boxes are more protected from natural disasters. Although nothing is 100% protected, safe deposit boxes are often constructed to withstand a lot of abuse. This includes natural disasters and fires. Some recommend that you put your valuables within a water resistant container so if there is a flood, hopefully, your vital information won’t! You may get a perk from your bank. According to Personal Finance HQ banks sometimes offer special rates for safe deposit boxes if you have already established accounts with them. Disadvantages Additional responsibilities for you. Even though you may get a perk from your bank, you are still paying money to rent the box. With the additional rent, you also have a new key to keep track of. If you lose your key it is often not replaceable, instead you are responsible for paying a fee to have the lock drilled out and a new one put in. Access is restricted. Guess what, you may not be able to get what you want when you want or need it. Safe deposit box is only available to you during the banks normal business hours. It is advisable not to store anything you might need in the event of an emergency or unplanned travel. Sound Money Tips suggests, contrary to popular opinion and practice, you not keep original documents, like legal documents in the box. The reasoning behind this is if someone dies there is usually a period of time that the box cannot be accessed. Foreignborn.com argues that originals of important documents such as birth certificates etc. can be stored in your deposit box, but that you ought to have your original power of attorney, passport and medical care directives stored elsewhere so they can be retrieved on a moment’s notice, day or night, seven days a week. Worse case scenario. ABC News reported that safe deposit boxes may be “not-so-safe-deposit boxes”. The article says that content’s are sometimes seized by various states to help them pay for budget deficits. When property in a box goes unclaimed (i.e. the owner died without telling anyone the box existed) the property goes to the state to help balance their budgets. There have been instances when states have seized boxes “active” boxes belonging to identifiable individuals. Documents have been shredded and assets sold for far less than appraised value. Some states are working to improve their processes so this doesn’t happen, but it is still a consideration. So what is the verdict? Do you go with a box or don’t you? What is your experience?