What to Put in a Safe Deposit Box

Safe deposit boxes are almost as old as the banking system. They have been used to safeguard valuables for centuries. With the ready availability of all types of insurance on property and contents, the use of safe deposit boxes has been declining for the last two decades. Good reasons to use a safe deposit box are outlined below.

What Really Should Go in a Safe Deposit Box

A longtime rule about what to put in a safe deposit box says, "If it's small, and irreplaceable, put it in a safe deposit box."  This provides a good baseline for deciding which items of intrinsic value to store in a safe deposit box at the bank. These include precious jewelry, gold and silver collectible coins, military medals that have been willed to the owner, and keepsakes like wristwatches, bibles or detailed family histories that are being kept for children or grandchildren.

Insurance Benefits from Using a Safe Deposit Box

Insurance companies often will reduce their premium on home contents insurance when safe deposit storage is used. The insurance cost for expensive jewelry that is rarely worn but is protected by a safe deposit box, however, changes when the gems leave the box.  The wearer must advise the insurance company of the date and time when he/she will be wearing the jewels, and a supplemental charge is added to the insurance for that period.

Items of Sentimental Value and Personal Papers

Even more precious than diamonds these days are people's memories and family history. People often rent a file-size safe deposit box from banks for photographs and rare film negatives, to protect them from loss or destruction. Small original artworks by lesser-known artists also are kept in boxes of this size.

It is also sensible to store personal papers not needed at short notice in a safe deposit box.  A precaution is that these should be copies of originals, particularly wills, title deeds and car and home insurance. The originals should remain in the care of your lawyer, or in a built-in home safe.

Disadvantages of Safe Deposit Box Storage

One disadvantage to safe deposit box storage is that, unfortunately, the contents are not insurable under the regulations of bank deposit insurance in either the USA or Canada. Only actual funds in your various bank accounts are covered by the $100,000 insurance provided by FDIC and CDIC in these countries. Damage to safe deposit box contents from fire, flood and theft may not be covered by your homeowner's insurance. Read and understand the terms and conditions of your policy.

Costs and Deductions

The costs of safe deposit box storage can vary from zero to a high monthly fee depending on your bank's policies. This may also make you reconsider putting anything in a safe deposit box. Safe deposit box fees can be deducted only if you use your safe deposit box to store investment instruments such as stock and bond certificates - a recommended use of such storage. Keep a copy of these either with your broker or your lawyer too in case you need them quickly.

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