Safe Deposit Boxes: Store This, Not That

When you rent a safe deposit box, the bank gives you a key to use, in tandem with a second “guard key” held by a bank employee, to access the box. You can rent a box in your name only, or you can add other people to the lease. It’s usually a good idea to name someone else to the account so that person can access the box’s contents when and if you can’t. Safe deposit boxes are undoubtedly more secure than most people’s homes. Bank vaults, of course, are harder to break into and are located in secure areas with alarms, video cameras, and top-notch locks. They’re also reinforced to withstand fire, floods, hurricanes, tornadoes, and other natural disasters.

Good things to store in your safe deposit box are important items that you won’t need frequent access to, including:

• Personal papers, such as original birth certificates, adoption papers, marriage licenses, and citizenship papers
• Copies - but not the only copies - of wills and powers of attorney
• Military records and discharge papers (e.g., DD 214s)
• School transcripts and diplomas
• Sensitive documents you wouldn’t want roommates, children, relatives, and visitors to stumble across
• The deed to your house, along with any car titles
• Paper stock and bond certificates (including U.S. savings bonds), if you have any (most are issued electronically these days)
• An inventory of your home’s contents in case you need to file a claim with your homeowner’s insurance policy
• Important business papers and records
• Important contracts
• Hard drives and flash drives with backups and important data
• Financially and/or sentimentally valuable jewelry, collectibles and family keepsakes
• Other documents or small items that would be difficult or impossible to replace

You’re better off keeping these items out of your safe deposit box:

• Passports: Even if you’re not a frequent international traveler, you never know when you’ll need your passport for business, a spontaneous trip, or to help a relative or friend overseas.
• The only copies of living wills, advanced medical directives, and durable powers of attorney: These are of little value if they are hidden away in a safe deposit box that no one can access. Tell your loved ones about the arrangements you’ve made and where they can find the documents.
• The only copy of your will: This is especially true if you haven’t designated a cosigner to your safe deposit box. If you pass away or become incapacitated, it can be difficult for your loved ones to access your safe deposit box and, therefore, the only copy of your will. It’s better to keep wills, living wills, medical directives, and powers of attorney in a secure place at home (such as that fireproof home safe) and tell a trusted relative or friend where they are and how to access them. (Also helpful: Give your medical proxy and the person who has your power of attorney copies of relevant documents.)
• Valuables you haven’t insured: Even though items in a safe deposit box are secure, you should make sure they’re covered by your homeowner’s insurance policy or a special rider, just in case (there are even companies that specialize in insuring safe deposit box contents). Keep in mind that the money you have in a federally insured bank or credit union is protected, but items in a safe deposit box are not. Tell your insurance company that the items will be kept in a safe deposit box. You might get away with a lower premium, as the items will be more secure than they would be in your home.
• Cash: Again, the money you deposit in a federally insured bank or credit union is protected up to $250,000 per depositor per bank, but cash in your safe deposit box is not. You’re much better off keeping cash in a savings, money market, or other type of bank account where it will be insured. You also might be able to earn a little interest, something that won’t happen if your cash is in a box.
• Anything illegal: Firearms may or may not be permitted, so ask your bank for clarification if it’s relevant. Explosives, hazardous materials, and illicit drugs are a no-no, needless to say.

For a more in-depth discussion of how to properly use your safe deposit box, read this article.