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May 2024 Fed Meeting: Key TakeawaysTips and Costs of Bank Safe Deposit Boxes
Last year the FDIC published some useful tips on bank safe deposit boxes including the reminder that FDIC insurance covers only deposit accounts, and not the contents of safe deposit boxes.
A recent article on safe deposit boxes mentioned the typical rental costs of safe deposit boxes to be from $100 to $300. From my experiences you should be able to get a small safe deposit box for much less than this. And don't forget that many credit unions offer safe deposit box rentals. I only pay $12.50/year for a small box at my local credit union.
Another way you can get a deal on a safe deposit box is if you have a premium checking account at a bank. A premium type of checking account can often be free of monthly fees if you have a high enough balance in a CD. A free safe deposit box is a common perk with these checking accounts. However, it's typically only free for a small box. So if you need more space or if the bank doesn't have any more small boxes left, you may still have to pay.
When I opened a 5% 3-year Wachovia CD back in 2008, the banker upgraded my checking account to the premium checking version which qualified me for a free safe deposit box. Since my credit union safe deposit box had a low cost and was more convenient for me, I passed on the deal.
One useful tip mentioned by the FDIC is to use zip-lock bags for contents in a safe deposit box. If flooding occurs, your contents won't get water damaged.
In addition to storing important documents, I also store a backup of my hard drive in the safe deposit box. I don't have many pictures or videos so I'm able to store all my electronic documents on a USB flash drive. Each year, I'll replace the old flash drive with a new flash drive of the latest contents of my hard drive.
Do you have any tips about saving money on safe deposit boxes or what to keep in them?
You mentioned hard drive copy, with the drop in prices of portable external drives, I am looking at buying two drives and rotating them between home and the safety box. My planning centers around what to do if I come home and home is completely gone. Or I cannot get into the structure.
There was one case on San Francisco peninsula about 3-5 years ago. New safe deposit boxes were being installed by a specialized contractor. Bank didn't go though all the old boxes beforehand. Entire banks of boxes were scrapped - with contents. Can't find the story online.
Found this case: On October 6, 2004, DBS Bank (Hong Kong) Limited announced that, during the renovation of its branch in Mei Foo Sun Chuen, in Kowloon, when the bank attempted to remove more than 900 empty safety boxes from the branch, 83 safety boxes rented by customers and containing valuables were accidentally removed. The 83 boxes were subsequently sent to a scrapyard and crushed. The bank reported that 36 boxes were recovered, although the valuables contained inside were badly damaged.
Admittedly, these are freak incidents.
Floods are fairly common, judging by what turned up in my google search.
From FDIC.gov When a bank fails:
When can I have access to my safe deposit box?
When the failed bank's deposits are assumed by a healthy bank, the branch offices usually reopen the next business day. At that time, you will have access to your safe deposit boxes. In the event of a depositor payoff, the FDIC will send a letter to you informing you of the closing. The letter will instruct you on how you can remove the contents of your box. Access to the safe deposit boxes is typically granted to the safe deposit holders the next business day after the closure.
If one cannot get in the front door why does one think that they can get into the vault? I recall that when the banks close, the banks close! For example during the Great Depression everything was closed by FDR and later reopened. Gov't action will preclude any legal action against a bank.
Can it happen here? Yes, but what is the risk wherever the funds are? Bank of Mattress is good until the currency is worthless and/or there is chaos/disorder in the streets, etc. Once one spends money, the recipient knows who you are...get it!! But this also assumes that the local currency can be converted, especially if the purchased items are foreign! Hint/hint...where can that be?