Safe deposit is often a bank's most misunderstood service area. Typically, it is located far from the main floor and tucked away inside a huge vault in some distant corner of the basement. Many bank customers take safe deposit for granted. A brief review of the main rules and regulations for safe deposit can give bank customers a new appreciation for this valuable service and its place in their lives.
A key feature of safe deposit boxes is privacy. For this reason, there are strict rules about access. If a customer wants someone else, for example a spouse or business partner, to share access to the box, then the box must be rented jointly; both parties sign the bank's documents together when they first rent the box. In an emergency, a renter cannot give someone else temporary access by simply handing over the key; the person would not be able to sign in correctly. Similarly, a power of attorney does not grant access to a safe deposit box to another person. Banks have rules that prohibit safe-deposit attendants from looking at the contents of customers' boxes while they are assisting them.
There are no federal or state laws concerning what cannot be stored in a safe deposit box. The only restrictions are those in the bank's contract that the customer signs when she rents a box. Most bank contracts prohibit anything dangerous, such as explosives. There are no rules against keeping cash in safe deposit boxes.
In order for any law enforcement agency to gain access to a safe deposit box, it must persuade the appropriate court that there is "reasonable cause" to suspect that the box renter is hiding something illegal in the box (guns, illegal drugs, or stolen property). The Internal Revenue Service can "freeze" assets, including the contents of a safe deposit box, until the tax dispute is resolved. Creditors seeking payment can do the same if they satisfy a judge that such an action is warranted.
No FDIC Insurance
The Federal Deposit Insurance Corporation insures only deposits in accounts (current accounts, for example) at banks. Even though the word "deposit" appears in the term safe deposit box, there is no insurable deposit implied.
If the renter of a safe deposit box fails to pay his rental fee for a number of years (set by state law) and the bank is unable to notify him of the problem, the bank can declare that the box has been abandoned. Any contents will be turned over to the state, which has its own legal procedure for further handling of any abandoned property.