19 Reasons Why You Shouldn’t Rent a Safety Deposit Box

Safety deposit boxes are individually secured containers in federally insured bank or credit union vaults. While they can be helpful for some, they’re becoming less relevant in an increasingly digital world, with many stored with private companies or at home. Here are 19 reasons to avoid renting a safety box.

Limited Accessibility

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It’s a common misconception that you’ll have 24-hour access to your safety deposit box. Investopedia notes that you shouldn’t leave anything in there that you might need urgently. Most safety deposit boxes are only accessible during regular bank hours, and some financial institutions require you to make an appointment before accessing your box.

Cost Considerations

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It’s not uncommon for banks to increase the rental fee for safe deposit boxes. This could be an annual charge, so renting a box could be quite expensive over time. You should look into other storage options with private companies or alternative financial institutions, as these may come at a lower cost.

Limited Space

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Safety deposit boxes come in limited sizes, with Investopedia noting that the “largest safe deposit boxes are usually just 10 inches by 10 inches and two feet deep.” Size limitations will naturally restrict what you can store in a safety deposit box, making them unsuitable for large and bulky items. This could result in the need for multiple boxes for different items, increasing costs.

Legal and Beneficiary Complications

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After the owner of a safety deposit box passes away, accessing the box’s contents can be legally complicated, with heirs facing potential delays and legal hurdles before they can retrieve the contents. Banks may further delay by requiring a court order or proof of executorship.

Privacy Concerns

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The bank storing your safety deposit box may monitor and record your access to the box, and in some cases, bank employees may be present during access. This monitoring and recording add to the perceived lack of complete privacy when renting safety deposit boxes, compared to home storage.

No Insurance Coverage

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The Federal Deposit Insurance Corporation reports that banks and other financial institutions generally don’t insure the contents of safety deposit boxes. Also, personal insurance policies may not cover items held in safety deposit boxes. This lack of insurance coverage could make the recovery of value in cases of loss or damage difficult or even impossible.

Risk of Bank Failures

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Although rare, bank failures can restrict your access to your safety deposit boxes. During bank insolvency proceedings, attempts to retrieve items can be delayed. Economic crises, such as the Great Recession of 2008–2009, increase the risk of bank failures, making renting safety deposit boxes uncertain.

Security Breach Risks

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While generally secure, safety deposit boxes are not impervious to security breaches or even theft. Organized criminal groups may target high-profile banks, with infamous examples including the 2015 Hatton Garden safety deposit burglary. Banks may not be liable for thefts, leaving safety deposit box renters without recourse.

Government Access

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LegalMatch reports that under certain circumstances, government regulatory or enforcement agencies can obtain a court order to access your safety deposit box. They could access it if these agencies had “reasonable cause” to believe a box contained illegal or illegally obtained items. Court orders can also breach your privacy.

Misplaced Trust in Banks

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Banks are not infallible with security measures and can make errors, meaning overreliance on their security could lead to complacency in your personal security measures. Items with high monetary or sentimental value may be more secure in a personal safe or secure location in your residence.

Hassles in Joint Ownership

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You can provide joint access to your safety deposit box. The person will have equal and unrestricted access to the contents of your box and will be considered a joint renter. This joint ownership comes with inherent risks, including mismanagement and unauthorized removal of items by a co-owner. Complications can also arise when one owner passes away or becomes incapacitated.

Vulnerability to Natural Disasters

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You may be surprised that safety deposit boxes are not immune to natural disasters such as floods, earthquakes, or fires. Even more, as American Banker says, your bank may not be liable for any damages to the safety deposit box in case a natural disaster occurs. This means that your valuables may not be recovered if the building is damaged, and you would not be reimbursed for the box’s contents.

No Immediate Access in Emergencies

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Emergencies happen when you least expect them to, and immediate access to important documents or valuables in your box is critical during these crises. But banks are often closed during holidays and weekends. These delays could be highly detrimental in time-sensitive situations.

Potential Legal Scrutiny

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Large deposits or withdrawals into a safety deposit box can attract legal scrutiny, as banks must report suspicious activities. A decision to make a substantial deposit or withdrawal into your safety boxes could result in your bank alerting the authorities, inadvertently involving you in legal investigations.

Risk of Forgotten Contents

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Box contents may be forgotten over time, especially if they’re rarely accessed. Important documents and valuables can be overlooked, and there’s a risk of the contents of your box becoming outdated or irrelevant if they aren’t regularly reviewed. According to LegalMatch, most states allow banks to surrender forgotten boxes to the government.

Inconvenience in Location and Relocation

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If you decide to move to a new area, you may have to transfer the contents of your safety boxes to a new bank if you depend on proximity to the bank for regular access. You may also face difficulties managing your boxes if you travel frequently for work or reside in multiple locations.

Overconfidence in Bank Security

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Banks are often thought to be impenetrable, and this misconception could result in overconfidence in the security of your safety box. Security measures vary significantly between banks. A false sense of security in your bank could lead to neglecting other protective measures.

Restrictions on Stored Items

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Banks often have a list of restricted items on what can be stored in safety deposit boxes, similar to airlines restricting what can be brought onboard a flight. Commonly banned items include liquids, explosives, drugs, and firearms. Unknowingly storing a prohibited item could risk you breaching your contract.

Lack of Digital Convenience

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In an increasingly digital world, storage is often needed in the form of backups, hard drives, and USBs. Physical storage is becoming outdated for many items that need storing, and safety deposits do not cater to digital asset storage.

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