Are Safety Deposit Boxes Actually Safe?

Protecting family heirlooms, collectibles, and important documents can lead to an endless amount of worry.

Although many of us have been led to believe that safety deposit boxes offered by banks across the United States are safe, it doesn’t mean your property is fully protected.

This sense of worry can escalate if you’ve heard the story of Phillip Poniz, who opened his first safety deposit box during the 1980s. Over the next few decades, although the bank changed hands, he used the same box to store personal items.

Then, on April 7, 2014, Poniz lifted the metal lid to his safe deposit box to find that it had been emptied.

In a report by the New York Times, it was discovered that the bank had mistaken his deposit box for the box of another customer who was unable to keep up with the payments.

The contents had been shipped to a storage facility in North Carolina. Watches, coins, family photographs, and more precious heirlooms have still not been returned to Poniz.

In this example, the safety deposit box was not secure, nor did it provide the protection that was needed.

It’s normal to have questions surrounding safe deposit boxes, such as how well your belongings will be protected, and which items should not be kept in one.

Before you decide to open a safety deposit box, it’s important to understand if renting one holds any benefits to you, if your items are insured by the bank, and what items should not go in the box.

Are Contents in a Safety Deposit Box Insured?

Safety deposit boxes are housed within a locked vault, which gives the outwards appearance of safety and assurance. Theoretically, contents in a safety deposit box are safe from being stolen and safe from the wear and tear that comes from keeping valuables out in the open.

However, the Federal Deposit Insurance Corp. (FDIC) does not insure the contents of a safety deposit box. The FDIC only insures the money found within accounts at FDIC-insured banks, like HRCCU.

If something were to happen, these banking accounts would be protected, but the contents of a safety deposit box would not.

When you decide to open a safety deposit box, it is generally a good idea to consider adding a policy covering the contents of the box to your homeowners or renter’s insurance policy.

This way, if something were to happen, your items would have some coverage.

What Items Should Not be Kept in a Safety Deposit Box?

It’s best to avoid storing items you might need on a short notice in a safety deposit box.

People should also avoid leaving the original copy, or the only copy of important paperwork in a safety deposit box.

Medical directives, living will, marriage license, and many others should be kept in a locked safe at home with a copy being held elsewhere.

As we’ve learned with the coronavirus pandemic, businesses can quickly become closed to the public with an unknown reopening date.

Even if the document isn’t needed on a regular basis, or on short notice, consider the stress it can cause you to not have access to it for an unknown length of time.

The same consideration should be given to your money. Yes, a safety deposit box can be safer than a box hidden under your bed, but neither are ideal.

Instead, a savings account or checking account from an FDIC-insured credit union should be used.

Are There Benefits to Opening a Safety Deposit Box?

Even though it’s been determined that safety deposit boxes are not as safe as expected, they might be a better solution for keeping valuables than some people’s homes.

If you live with roommates or have pets and children who might inadvertently damage valuables, a safety deposit box might be the best option.

Lack of organization or a place for safe keeping — like a filing cabinet or safe, can lead to important items becoming lost or stolen.

It’s worth noting that vaults offer greater security and protection against theft and natural disasters than our homes can offer.

But, is that better than knowing your items haven’t been lost or stolen?

Contact HRCCU for More Info on Safety Deposit Boxes

If you choose to use a safety deposit box, you are advised to proceed with caution as it might not be the best solution to fit your needs.

For those who have additional questions about safety deposit boxes and safeguarding your finances, contact our financial experts today.

We’ll be happy to answer any questions you may have about protecting your assets.