Safe Deposit Box or Home Safe: Which is the Best Place for Your Valuables?
There are pros and cons for using either a safe deposit box at a bank or a home safe, including some things I’ll bet you’ve never thought of. I’m going to list a few ideas you need to be aware of so you can make an informed decision. After all, you don’t want to place your newly-acquired gold bullion, your heirlooms and expensive jewelry, or your important papers at risk.
Safe Deposit Box
Nothing in your safe deposit box is insured by the FDIC, nor is the bank liable for it. So be sure these items are included in your personal insurance policy, even if you have to add a rider (a personal-articles floater). Ask for language stating “we cover personal property owned or used by an insured while it is anywhere in the world” for your jewelry.
If there is a flood (remember Hurricane Katrina?), water will often get into the deposit box. Therefore, put all valuables into airtight zip-lock or Tupperware-type containers, and put your name on each container, before putting them in the safe deposit box, and keep a list of the container’s contents at another location.
If a bomb goes off in the safe deposit box area, or there is a big fire, your papers will quickly become ashes. Therefore, make photocopies of everything that is in the box. You might also consider putting documents into fire resistant document bags, such as U.S. Patrol JB5076 Fire Resistant Document Bag .
Take pictures of each item you put into the deposit box and keep them with the photocopies of the documents. You can also digitize the photos and scan in the documents so you can keep them in a file on your computer and also on a computer disk. Make two copies and send one of the disks to someone you trust for safe-keeping.
Do not keep anything in a safe deposit box that you might need immediate access to when the bank isn’t open (nights, holidays, weekends), such as your passport or a power of attorney.
According to David McGuinn, of the Houston-based company Safe Deposit Specialists, “There are no federal laws about what can or can’t be kept in a safe deposit box, there’s nothing the states can say about what you put in there.” Read your Safe Deposit Box Contract with the bank. It might specifically prohibit items such as explosives. He says that banks don’t monitor what’s in there because banks don’t look.
However, that isn’t always the case. If the police suspect that something illegal is being kept in there, they can get a court order to break into your safe deposit box and view the contents.
Also, if the bank considers your box abandoned, it can open your deposit box and auction off the contents and the state government can keep any money it finds or that results from the sale of the contents. They don’t have to notify you before doing this.
Do you think you’re protected if your box rent is paid up and you check on your box at least once a year? Probably, but not necessarily. The recent scandal in California involving Bank of America is a case in point. Read this article from Good Morning America before making a decision about whether to use a safe deposit box or to instead use a home safe.
The advantage of having a home safe is that you can access your valuables anytime you want to. Of course the disadvantage is that a thief could come into your home and walk off with your safe or force you to open it. On the other hand, that would only happen if the thief knows you have a home safe and knows where you have carefully hidden it. Therefore if you are confronted by a thief who wants your valuables, let him or her know that you keep them in your safe deposit box, even if you don’t have one!
All the same precautions apply as outlined in the safe deposit box section. Keep all valuables in airtight waterproof containers even if you have a “waterproof” safe. Keep a photocopy of all important documents in another location, including on a computer disk. Take photos of precious metals, jewelry, and other items and store them on a computer disk as well. Give a duplicate of the disk to a trusted friend for safekeeping. And make sure your valuables are covered in a rider on your insurance policy.
This is the place to keep your passport, power of attorney, some emergency cash, frequently-worn jewelry, and other items that you wouldn’t put in a safe deposit box even if you have one. In other words, one does not preclude the other; you can use both.
While they can be expensive, many home safes are actually very affordable. You want to get a fire-proof safe that is also waterproof. I’m going to list a few below, with links, so you can read more about ones that interest you. Notice that some of them have “1-Hour” or “2-Hour” in their names. This is the length of time the items within the safe will be completely protected if the safe itself is directly in a fire.
According to the National Fire Prevention Association, most residential fires last less than 30 minutes with fires lasting longer than one hour being rare.
If you have additional tips or information you’d like to share on this subject, please let me know in the Comment section!