WHAT YOU NEED TO KNOW ABOUT THEM
They are best for storing documents and valuables that you usually don’t need on short notice, writes ANN CARRNS
AS personal banking goes digital, safe-deposit boxes may seem a relic from the analog age. Yet, some people still want the security of storage away from home for valuables, important papers and sentimental keepsakes, financial advisers say.
A safe-deposit box is a locked storage bin, usually located in a vault or secure area, that banks and credit unions rent. Typically, customers receive a key and must check in with a bank employee, who uses a second “guard” key in tandem with the customer’s key, to unlock the box. Some banks may offer keyless systems that allow access by scanning a finger or hand.
Federal regulators and industry groups said they don’t have statistics on the use or availability of safe-deposit boxes, but some banks and financial advisers said demand has been slack.
A Bank of America spokesman, Betty Riess, said demand for the boxes has dropped “significantly”, particularly among younger customers who prefer digital storage of documents. Fewer than half of its safe-deposit boxes are rented, she said. Elyse Foster, a financial planner in Boulder, Colorado, said that when she contacted several banks on behalf of a client to ask if they offered safedeposit boxes, “I kept getting ‘no’ answers.” Foster said she was told the boxes took up too much space and demand had fallen in favour of home safes.
But, Elizabeth Seymour, a spokesman for JPMorgan Chase, said that while she did not have historical data available, Chase currently has safe-deposit boxes in more than half of its branches and that they are still popular with customers.
David McGuinn, a safe-deposit box consultant in Houston, said there were still millions of boxes rented and plenty of branches offering them. He said he considered them “the safest place to store anything you consider valuable.”
So, what should you keep a safedeposit box?
They are best for storing documents and valuables that you usually don’t need on short notice. The Federal Deposit Insurance Corp says “good candidates” include originals of birth certificates, property deeds, car titles as well as paper US savings bonds that haven’t been converted into electronic versions (availability of paper savings bonds is limited these days).
If you travel often or on short notice, keeping a passport in a safe-deposit box may be inconvenient, since you can only access the safe-deposit box during regular bank hours. A home safe may be a better choice. Estate lawyers generally frown on keeping wills in safe-deposit boxes in case access to the box is restricted after the owner’s death. That may cause delays in retrieving the will.
Storing emergency cash in a safe-deposit box is also unwise, advisers say. Unlike money in a deposit account, cash in a safedeposit box isn’t insured, and it may be vulnerable to theft.
David J. O’Brien, a fee-only financial planner in Midlothian, Virginia, said he encouraged clients to take an inventory and to visit the box periodically to verify its contents.
He said a relative’s safe-deposit box was mistakenly drilled open and emptied by her bank, which had confused it with another box with a similar number whose owner had fallen delinquent on rental fees.
The box’s contents — including a watch with sentimental value — were eventually recovered, he said. But, the incident suggests that letting items languish indefinitely is a mistake.
“You need to catalog what’s in it,” he said, “and then check on it.”
A safe-deposit box is a locked storage bin, usually located in a vault or secure area, that banks and credit unions rent. Typically, customers receive a key and must check in with a bank employee, who uses a second ‘guard’ key in tandem with the customer’s key, to unlock the box.