6 Tips for Using a Safe Deposit Box

6 Tips for Using a Safe Deposit Box

The idea seems simple enough — stash your important papers, the family jewels and even a gold bar or two in a bank safe deposit box. But not so fast — take these measures first before locking up your valuables, which might not be as safe as you think.

Why the concern over safe deposit boxes? In France, thieves operating off a Hollywood-type script tunneled into a Credit Lyonnais bank branch in Paris. Talk about having the guts of a cat burglar — the bank branch is located right down the street from the Louvre and the old Paris Opera House. But that didn’t stop the thieves from breaking in (through ventilation pipes from a neighboring building) and ransacking 100-125 safe deposit boxes.

Another break-in occurred at a bank located in the Paris suburbs in September. In that raid, 117 safe deposit boxes were cracked and emptied.

The odds of that happening here in the U.S., especially in well-guarded, bigger banks in downtown areas, are slim. But that doesn’t mean you shouldn’t take extra steps to safeguard your safe deposit box, especially as more Americans turn to safe deposit boxes both in their banks and in the home to protect assets in a tough economy.

Here’s a list of steps to take if you’re in the market for a safe deposit box.

  1. Opt for a bank safe over a home safe. While home safes can be had for as little as $99, they’re much easier for thieves to crack. Most home safes weight less than 100 lbs., so it’s not that difficult for thieves to walk off with your safe — and your valuables. That’s not going to happen with a bank safe, which is both heavily guarded and securely constructed.
  2. Don’t confuse FDIC rules with safe deposit boxes. If you do opt for a safe deposit box, know that your assets inside the box are not covered by FDIC bank insurance deposit rules. What you can do to insure your valuables is attach a rider (known as a Personal Articles Floater) to your homeowner’s policy. If you think you don’t need insurance, just ask New Orleans bank safe customers after Hurricane Katrina hit in 2005. Police estimate that more than 250 banks and home safe vaults were flooded.
  3. Go ahead and stash important papers — but make copies. Deeds, car titles, family birth records, stock certificates and wills and trusts may seem like good candidates to go into a safe deposit box. That’s true, but if it’s the only copy of the document you’ll want to make a copy in case the unexpected happens.
  4. Tell your insurance company you use a safe deposit box — you could get a price break. Many insurance companies will offer lower premiums on your valuables if you use a safe deposit box. But you have to ask.
  5. What will it cost? You’ll likely pay anywhere from $100-$300 for a bank safe deposit box rental (as an annual fee). If you buy your own box, a good rule of thumb is about $1 per pound. In other words, a 200 lb. safe deposit box will cost around $200.
  6. What about insurance? Your mileage may vary depending on the insurer (and what you’re insuring) but, by and large, expect to pay about $20 in insurance per $1,000 worth of coverage.

In volatile economic times, guarding your valuables in a safe deposit box makes good sense. Just exercise some precaution going in, and use the checklist above to get the most from your exercise in financial safety.