About safe-deposit boxes

Written by m. wade
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About safe-deposit boxes
(Photo courtesy: Alvimann)

Banks offer safe-deposit boxes to customers who seek the added security of a bank to store their most important items. Customers who have a safe-deposit box are called "renters" and pay an annual fee for the safe-deposit box. Before deciding to rent a safe-deposit box from your bank, you should become familiar with how they are used, their safety features and which items should never be placed in a safe-deposit box.

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Function

The primary purpose of a safe-deposit box, sometimes erroneously called a "safety deposit box," is to securely store important documents and valuables, such as deeds, family photo negatives and jewellery. In order to get a safe-deposit box, bank customers must enter into a lease agreement with the bank and pay an annual fee based on the size of the box.

Types

Banks offer a variety of security features, safe-deposit box sizes and pricing structures. In general, safe-deposit boxes are stored in the vault in the bank--a room usually reinforced with steel. The safe-deposit boxes themselves are usually made of a type of reinforced metal, as well, and vary in size. The smallest safe-deposit boxes are usually 2" x 5" x 12", with the largest boxes having dimensions around 15" x 22" x 22". Some banks also provide digital safe-deposit boxes used for storing sensitive data files, such as confidential business records. In addition to comparing signatures to those on file for authorised renters and requiring a key from the renters, banks may have additional types of security for accessing safe-deposit boxes. These can include pass codes and fingerprint or biometric technology.

Benefits

The primary benefits of safe-deposit boxes are the protection of stored items and the access limitations the renter and bank agree to set. To gain access to a safe-deposit box, a person must first sign admission documentation. The banker compares the signature to those of the people it has on file as renters of the safe-deposit box and requires the renter to have a key. Depending on the bank's policies, a banker may accompany the individual into the safe-deposit vault.

Considerations

Not all documents and valuables are ideal for placement in a safe-deposit box. Before deciding to store an item in a safe-deposit box, potential renters should consider whether the item will be necessary during an emergency situation, and, therefore, should be stored somewhere more accessible. For example, passports are best stored elsewhere in case an emergency trip must be taken and original living wills should be easily accessible in case of a late-night medical catastrophe.

Misconceptions

Some renters mistakenly believe that because their valuables are stored in a bank, the items are under FDIC protection up to £65,000, like bank accounts. This is incorrect. Renters must purchase separate insurance to insure their stored items. Before signing a lease agreement for a safe-deposit box, renters should always read the terms and conditions of the lease agreement.

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