Banking 101: What is a Safe Deposit Box?

A safe deposit box (or safety deposit box) is an individual secure container, usually a metal box, that is stored in a locked room such as the safe or vault of a federally insured bank or credit union. The safe deposit box is a long, narrow metal box with two keyholes, and the only way to unlock it is by using both keys at once. Boxes can be as small as 3 inches by 5 inches to as large as 10 inches by 15 inches.

Safe deposit boxes and the vaults where they are stored are designed to withstand natural disasters such as fires, floods, hurricanes, and tornadoes, and are a protected location used to safeguard valuables, important documents, and sentimental keepsakes.

How a Safe Deposit Box Works

When you rent a safe deposit box, the bank gives you a personal key, and in some cases, two keys.  The bank does not retain a copy of the personal key, but instead, the Bank maintains a second key that must be used in conjunction with the customer’s personal key in order to gain access to the safe deposit box.

To access your box, you present your key and identification.  In most cases, the bank representative will time-stamp an access card and will request the customer sign the card prior to accessing their safe deposit box.  This is to track when and who entered the safe deposit box. 

The customer will then insert their personal key into one of the locks and the banker will insert the financial institution’s key into the second lock.  Turning both keys will open the vault containing the safe deposit box. Some financial institutions have keyless systems that scan your finger or hand for entry instead of a physical key.

Safe deposit boxes can be rented by an individual in one name, or others can be added to the lease. A co-lessee on a safe deposit box will have a key and equal access and rights to the contents of the box.

When you open a safe deposit box, the lease agreement will state how long you’ll have access to the box, the rental cost, and what you can and cannot store in it.

What Safe Deposit Boxes Can and Shouldn’t Hold

Safe deposit boxes are a good place to keep hard-to-replace documents such as:

• Family documents such as marriage, birth, adoption, and divorce certificates
• Death certificate for a spouse or other close relative
• Military discharge papers
• Contracts and business documents
• Copies of wills and powers of attorney (but not the original or only copy)
• Property records such as deeds, property and title surveys, settlement documents
• Title to your vehicle
• Flash drives with backups and important data
• Special occasion jewelry, small collectibles, and family heirlooms
• Stock and bond certificates
• Home insurance inventory listing or video of your belongings and their value.

One item that is the subject of debate about storage in a safe deposit box is a passport. You probably don’t need your passport daily and it can be hard to replace, factors which make it a candidate for safekeeping in a safe deposit box. But if you ever have to make an emergency international trip and need your passport in a hurry, you may not be able to access it quickly if it is locked away at the bank.

Items that are not allowed in safe deposit boxes include:

• Firearms, ammunition, or other weapons
• Explosives and/or hazardous materials
• Illegal substances including drugs
• Alcohol
• Perishable goods
• Cremated remains

Safe Deposit Box Benefits

Safe deposit boxes are more secure than most people’s homes. Most homes don’t have a built in safe, and a portable safe could be removed from the premises and drilled into later.

Bank vaults are located in secure areas with alarms, video cameras, and top-notch locking mechanisms. Safe deposit box locations are designed to be secure and able to withstand natural disasters.

Why a Safe Deposit Box Might Not Work for You

While a safe deposit box can bring peace of mind for the safe storage of valuable items, they may not be right in every situation and have features that could make them inconvenient. Access is limited to the financial institution’s business hours, which could be a problem for papers needed in an emergency. In addition, many individuals are unaware that the contents of a safe deposit box are not insured in the same way as deposits in bank or credit union accounts.

Non-payment of the box rent is considered abandonment, and the contents are turned over to the state’s unclaimed property offices for auction. This could be a problem if the payments stopped because the renter became ill or incapacitated or if heirs are not aware of the safe deposit box upon the death of the box renter.

Safe Deposit Box Best Practices

For added protection from water damage in case of a flood, secure valuable papers, photos, and other vulnerable items in a watertight plastic container or zip-top plastic bag before storing them in your safe deposit box.

Consider carrying insurance on high-value items stored in a safe deposit box. This can often be accomplished with a floater to your homeowner’s insurance policy and may require an appraisal of individual items.

Because they might be needed quickly in an emergency and outside of banking hours, medical directives or a living will should not be stored in a safe deposit box. Consider using a secure spot like a fireproof home safe.

Cash should not be stored in a safe deposit box. It won’t be covered by FDIC insurance like a deposit, and some banks explicitly forbid it.

The original documents of your will, power of attorney, and letter of instructions for your estate should be held by your lawyer or executor. In some states, banks automatically seal the safe deposit box upon the death of the owner. This can create delays for heirs who may need a court order to access the box for documents inside that might be needed to settle the estate.

It’s a wise idea to keep an up-to-date list of the contents of your safe deposit box in a separate location. That way, if the box is somehow damaged, you’ll know what you’ve lost so you can replace the missing documents or file an insurance claim for lost valuables. It also lets your heirs know what is inside the box if they can’t gain access to it right away.

To learn about products and services offered by Enterprise Bank, please visit https://www.enterprisebanking.com. If you would like to speak to an Enterprise Banker about opening an account or renting a safe deposit box, we invite you to call us at 877-671-2265 or visit one of our convenient branch locations.