Do You Need a Safe Deposit Box?

Quick Answer

While a safe deposit box at your bank can be a secure place to store important documents, family heirlooms or valuable items, it may not always be necessary. In addition, there are some things you should never keep in a safe deposit box.

A person uses a key to open their safety deposit box.

A bank safe deposit box can help you protect important documents, sentimental objects and valuables from fire and theft. Whether or not you need a safe deposit box comes down to your personal situation, but in many cases, safe deposit boxes aren't necessary. Their usefulness for safekeeping objects may be outweighed by their lack of convenience—and the risk that the box may be lost, stolen or otherwise mishandled. Read on to learn how safe deposit boxes work, the risks they present and how you might better protect your precious possessions.

How Do Safe Deposit Boxes Work?

A safe deposit box or safety deposit box is typically a long metal box locked and stored in a vault at a bank or credit union. Safe deposit boxes come in various sizes, generally ranging from 3 by 5 inches to 10 by 10 inches.

Items commonly stored in safe deposit boxes include:

  • Birth, death and marriage certificates
  • Real estate deeds
  • Car titles
  • Paper stocks or savings bonds
  • Family heirlooms and photos
  • Important legal documents

Then there are items that may seem important to lock away, but generally aren't a good idea to keep in a safe deposit box. This includes items you or others may need unexpectedly, such as passports, COVID-19 vaccination cards, powers of attorney, living wills or a last will and testament. You also cannot store drugs, firearms, weapons, ammunition, hazardous or explosive items, or human remains in a safe deposit box.

Banks typically protect safe deposit boxes using dual-key systems. The bank uses a physical or electronic key to open the vault, and you then use your key to open your safe deposit box. Banks also require an authorized signature to access a safe deposit box. When you open your account, anyone authorized to open the box must put their signature on file.

How to Get and Use a Safe Deposit Box

Financial institutions often offer customers free or discounted safe deposit boxes. If your bank's local branch doesn't have safe deposit boxes available, contact a different location or ask other financial institutions in your area.

Rental fees vary depending on box size, your bank, your location and state laws. In general, you'll pay between $20 and $200 annually, depending on the size of the box. Contact financial institutions in your area for pricing.

Here are the steps to get a safe deposit box:

  1. Decide what you want to store. This dictates the box size you'll need.
  2. Decide who can access the box. Multiple people (such as spouses) can rent a single safe deposit box. Co-renters can access the box without other co-renters present. Choose trustworthy co-renters; banks aren't liable if a co-renter removes something from the box without your approval.
  3. Make an appointment with the bank. Federal law requires financial institutions to confirm your identity—typically by verifying your name, address, birthdate, Social Security number and photo ID. Ask what documentation to bring.
  4. Open the account and sign the agreement. Safe deposit box rental agreements generally last one year, renewing annually. Your bank may bill you or withdraw the rental fee from your account automatically. Keep your contact information current so you don't miss notifications of payments due.
  5. Get your key and put your items in the safe deposit box. Make a list of everything in the box. Photograph the items. Keep the list, photos and safe deposit box keys secure at home.

Benefits of Using a Safe Deposit Box

A safe deposit box offers some important benefits.

  • It's safer than home storage. A locked vault at a bank can offer more security than a file cabinet or dresser drawer at home.
  • You know where things are. It's easy to misplace items at home. With a safe deposit box, your most important belongings are in one place, and you always know where they are.
  • Personal items are protected from family members. If your home life is insecure—for example, if you have family members who may not be trustworthy or you're going through a contentious divorce—a secure storage space ensures only you have access to important belongings.

Risks of Using a Safe Deposit Box

There are also some downsides to safe deposit boxes.

  • Banks have limited liability. If items in your safe deposit box are lost, misplaced or destroyed, you're generally out of luck. Contents of a safe deposit box—including cash—aren't protected by FDIC insurance, which only protects money in deposit accounts. You can protect your valuables with a rider to your homeowners insurance or renters insurance or look for companies that sell safe deposit box insurance.
  • Access is limited. You can only get into your box during bank hours. Banks sometimes close branches in the wake of a natural disaster (as they did at the beginning of the pandemic).
  • You could lose the contents if you don't pay the rent. If you fail to pay the rent for a certain period defined by the state, the box is considered dormant. The bank can open it and the contents become unclaimed property.
  • Survivors may face delays. State laws govern access to a deceased person's safe deposit box. If documents needed to settle your estate are in the box, a court order may be needed to get them.
  • Safe deposit boxes aren't disaster-proof. Minimize fire and flood risk by putting items inside waterproof, fireproof bags.

Alternatives to Safe Deposit Boxes

A safe deposit box isn't the only way to protect valuables. Consider these options:

  • Install a fire-, water- and burglar-proof home safe. Safes that mount securely so they can't be easily removed from the home can be had for under $200. Even pricier safes still cost less than decades of safe deposit box rent.
  • Ramp up home security. Installing new locks, a home security system and surveillance cameras could provide additional protection from theft.
  • Protect your home from fire and flood. Taking precautions to safeguard your home from natural disasters not only protects belongings, but may also reduce homeowners insurance premiums.
  • Store documents online. Keep originals of estate planning documents at your attorney's office. You can also scan, digitize and encrypt documents, then upload them to a secure cloud storage service and/or a thumb drive kept in a safe place. Although you can't use digital copies in place of originals, they'll make it easier to replace originals.

Play It Safe

Organizing critical documents is vital to managing your finances. A safe deposit box can help, but before renting one, read the agreement carefully. Don't entrust your valuables to a safe deposit box unless you understand its limitations, and always make sure your family members know how to access the box.