Ordinarily, a safe deposit box is a good place to keep your important documents. However, many of the important documents we need to save today are electronic: wills, mortgage documents, financial statements, etc. We typically store these on our computer's hard drive, which is vulnerable to viruses and malware and leaves us at risk of losing these documents.
File Vault offers you a free and secure online storage method for your electronic documents.
File Vault is a branded version of a product that is sold by DigitalMailer under the name My Virtual StrongBox. The first credit union to offer this product was Northwest Federal Credit Union. Its members who receive eStatements have access to 100MB of document storage at no charge. According to its My Virtual Strongbox page:
It serves as an online safe deposit box to keep copies of critical documents such as birth certificates, insurance coverage information, wills and more.
This type of service isn't new. Back in 2008 Wells Fargo launched a similar service. It was called vSafe. However, unlike DCU and Northwest Federal, Wells Fargo's service wasn't free. Customers had to pay $4.95/month for 1 GB of storage in vSafe. The service didn't attract enough customers, and Wells Fargo has shut it down.
One nice aspect of a virtual safe deposit box that's offered from your bank or credit union is that you know it's from a legitimate company.
One problem with this service from DCU and Northwest Federal is that the free storage is limited to 100MB. It appears members have access to more storage for a fee. That's probably how DigitalMailer hopes to increase revenue from this product.
How do you store and protect your electronic documents?
Even if you trust the security of the online backup services, you still have to worry about sensitive documents being accessed when they are locally on your PC. If your PC is stolen or if a virus infects your PC, those documents could be at risk.
To protect your documents when they are stored locally, there's encryption software that can be used. TrueCrypt is a popular choice for encryption that's free. The main concern for using software like this is that if you forget the password, there may be no way to gain access to the documents.
Once a document is encrypted, you then could copy the documents to flash drives that can be kept in a safe or in a physical safe deposit box. Another option is to keep them in the cloud. There are now many free online storage services like Google Drive and Dropbox.
Of course, no security is 100%. Even with the best encryption, there's always the chance that your password could be comprised by malware. It should be noted that there's also security risks with paper documents which can be stolen.
Besides security, there's another issue to consider. How will family members access important documents if you pass away or are incapacitated? If plans don't address this issue, electronic and online storage of documents can create problems.