How To Hide Money In A Safe Deposit Box

To some people, bank safe deposit boxes seem like a relic of the past. Nowadays, it's so easy to store financial records and other important documents in digital form that the idea of keeping important papers in a locked bank vault sounds ridiculously 20th-century. And indeed, there's evidence that safe deposit boxes are on the decline. The New York Times reports that many banks no longer offer them, and many that do say that half or more of their boxes are currently sitting empty.

But safe deposit boxes still serve a purpose. Even in today's largely paperless digital age, there are some occasions when you need the original copy of a paper document, such as your birth certificate or the deed to your house. And there's still no way to make digital copies of physical objects that are valuable to you, such as family heirlooms or collectibles. For these precious papers and belongings, a safe deposit box is still the safest place.

However, that doesn't mean you should use a safe deposit box to store everything you value. When your belongings are locked up in a box at the bank, you can only access them when the bank is open — which is a big problem for papers you might need to access in an emergency. And there are some physical valuables that, for one reason or another, are best stored elsewhere.

So if you have a safe deposit box, here's a rundown of what's best to store and not to store in it. And if you don't, here are some of the items that might make you consider getting one.

How Safe Deposit Boxes Work

For those who have never seen one in person, a safe deposit box is a long, narrow metal box that's stored in a locked room at a bank or credit union. A typical box has two keyholes, so the only way to unlock it is to insert both keys at once. You keep one key, and the bank has the other. If another person, such as a spouse, shares the box with you, each of you gets one copy of the renter's key.

Having two keys adds an extra layer of security. If someone steals the key to your safe deposit box, they won't be able to get into the box without the help of a bank employee. But the bank won't open a box, or the locked room where it's kept, for just anyone. Most banks require some proof of identity before they'll open a box, such as a signature that they can compare with your signature on file.

A safe deposit box is an extra that isn't included with a typical bank account. According to The New York Times, financial institutions charge anywhere from $20 to $200 per year for a box, depending on its size and the bank's location. However, some bank accounts give you a discount on this fee. (The cost used to be tax-deductible as well, but the 2017 tax reform bill eliminated this deduction.)

Advantages of a Safe Deposit Box

A safe deposit box isn't the only place to keep your valuables or important papers. For instance, you could safely store these items in a small fireproof safe at home. However, experts say a safe deposit box offers better security.

For one thing, most home safes are portable. It's possible to have a safe built into the wall of your home, but it's quite expensive. That means a burglar could simply make off with your entire safe and drill into it later to extract the contents. And if you happen to be home when criminals break in, they can force you to open the safe for them.

A safe deposit box also offers better protection against natural disasters. Bank vaults are usually strong enough to withstand fires and high winds that could destroy a typical home.

The one natural disaster they can't always protect against is a flood. Experts recommend sealing valuable papers, photos, and other vulnerable items inside a watertight plastic container or zip-top plastic bag before putting them in your safe deposit box. It provides extra protection from water damage in case of a flood.

Disadvantages of a Safe Deposit Box

Although a safe deposit box is the most secure place to store valuables, it's not the most accessible. You can only get into your box during the hours when the bank is open, and you might have to wait a while at the bank for an employee to help you access the box. And since many bank branches don't have safe deposit boxes at all, you might have to keep yours at a branch that isn't local, which means extra driving to and from the bank.

This is an even bigger problem during the COVID-19 pandemic of 2020 and 2021, when many national banks, including Bank of America, have temporarily closed some local bank branches.

Another problem is that putting valuables in a safe deposit box doesn't actually guarantee their safety. Although it's rare, banks occasionally open a customer's safe deposit box by mistake and lose some of the contents. According to The New York Times, every year, a few hundred people report that valuable items have gone missing from their safe deposit boxes.

Worse still, in cases such as these, the bank isn't actually required to compensate you for the lost items, even when it's clearly at fault for losing them. Unlike the money in your bank account, items in a safe deposit box are not covered by FDIC insurance – although the FDIC does guarantee that if your bank goes bust and the government takes it over, you'll regain access to your safe deposit box within one business day. A few banks have separate insurance policies to cover the items in safe deposit boxes, but most don't. You may not even be able to sue the bank to recover your losses since many banks have language in their safe deposit box rental agreements putting limits on their liability for lost property.

To protect yourself against the loss of items in your safe deposit box, you'll need to carry your own insurance. Your homeowners insurance policy may provide some coverage for items stored "off-premises" — that is, not on your property — but it's usually only a modest amount. So if you want to keep high-value items in a safe deposit box, you might need to add a special addendum, or "floater," to your policy for this purpose. The insurance agent who handles your policy can help you create this document.

The good news is that insurers often charge less to insure valuables if you store them securely at the bank. First, you'll need to get the individual items appraised. Then you can contact your insurance company about adding coverage for the value of the items.

What to Keep in Your Safe Deposit Box

A safe deposit box is the best place to keep documents and belongings that need the highest possible level of security. Here are some of the items you should keep in your box.

1. Property Records

When you buy a house, you have to handle a ton of documents at the closing. Some of these could be important to hold onto, such as the:

Deed. You'll need the deed to the property when you want to sell the house. You might also need it to prove you're the owner of record.
Settlement Documents. The closing statement and other settlement documents show how much you paid for the property. You'll need this information for tax purposes, particularly when you sell the house.
Property Survey. This document shows the boundaries of your property. It can come in handy if you ever get into a dispute with a neighbor over property lines.
Title Survey. The title survey and title insurance will be important if anyone disputes your claim to the property.

While these documents can be crucial in specific circumstances, it's highly unlikely you'll ever need to access them at a moment's notice. Storing them in your safe deposit box will keep them secure, and you can retrieve them if you ever need them.

2. Car Title

Like the deed to your home, your car title is a document that's important but rarely needed and is a big hassle to replace if it's lost. That makes a safe deposit box an ideal place for it. When it comes time to sell the car, you'll know exactly where to find the title: safe and sound in your box at the bank.

3. Important Personal Records

Your safe deposit box is a good place to keep the originals of important personal records, such as:

Birth certificates (your own or your children's)
Adoption records
Marriage certificate
Divorce certificate
Death certificate for a spouse or other close relative

You're unlikely to need any of these documents for everyday use, but if you do need them, it's quite a lot of work to get hold of a copy. You need to provide proof of your identity, pay a fee, and wait days or weeks to receive your documents. It's much less trouble to store them away safely.

4. Social Security Card

Carrying your Social Security card in your wallet is a big no-no, according to financial experts. If your wallet is lost or stolen, having your Social Security number right there puts you at risk of identity theft.

Besides, the chances that you'll need your Social Security card for ID on any given day are pretty remote. You might need your Social Security number for all kinds of documents, but you can memorize it. You'll only need the card itself on rare occasions, such as a real estate closing or renewing your driver's license. The rest of the time, your safe deposit box is the best place to keep it safe from thieves.

5. Stock & Bond Certificates

These days, buying stocks, Treasury bonds, or corporate bonds is usually an electronic transaction. Your ownership of the items is recorded digitally, and the records are stored on a server, so you don't need to worry about losing them or keeping them secure.

However, not so long ago, purchases such as these came with physical, paper certificates. According to Kiplinger, the New York Stock Exchange continued to require printed certificates for stock purchases up through 2001, and some banks still issued paper savings bonds as recently as 2011. And even today, if you use part of your tax refund to buy Series I savings bonds, you'll receive paper bonds by mail.

If you still own any of these old-school paper certificates, they're the only proof you have that you own the securities. The Securities and Exchange Commission has a procedure for replacing a lost or damaged certificate, but it's complicated and time-consuming. It's much easier to safely lock the originals away while keeping a record of the numbers — or a photocopy of the certificates themselves — on file at home just in case.

6. Small Valuables

Along with documents, your safe deposit box is a secure place to store small, valuable items you'd rather not keep in your house. Jewelry is one example. If you have jewelry you wear all the time — such as an engagement ring or a pearl necklace you regularly wear to work — then, naturally, you'll want to keep it at home, no matter how valuable it is.

But if you have a few pricey pieces you only wear for special occasions, such as a tiara, locking them in your safe deposit box will keep them secure the rest of the time. You can also use the box to store family jewelry that you never wear but don't want to get rid of for sentimental reasons.

A safe deposit box is also good for storing small collectibles. Obviously, some collections (such as antiques, pottery, or rare books) are much too big to fit in a safe deposit box. But if you collect any smaller items (such as stamps, coins, or vintage baseball cards), your bank can provide safe storage for them and protect them from damage. Just open the box whenever you want to add an item to your collection or take one out to sell.

However, before stashing any valuables in your safe deposit box, make sure you have insurance to cover them. As noted above, homeowners' insurance doesn't always provide much coverage for belongings you don't keep at home. A safe deposit box is more secure than most places, but it's not 100% damage-proof, and there's no sense in taking any risks with a valuable collection.

7. Treasured Memories

Some of the items you value most aren't worth much in dollar terms, but you associate them with cherished memories. Your safe deposit box can provide secure storage for personal papers such as letters from friends and family or old diaries — your own or a long-deceased relative's. You can scan these items before stashing them away so that you'll always have a backup, but that's no substitute for a cherished object you can hold in your own hands.

You can also use the box to stash away old family photos that were taken long before digital cameras and cloud storage. If you have the negatives, you can put these in the safe deposit box while keeping the original prints in your family album. If not, scan the photos to create a backup before locking them away. Store the digital copies in the cloud, on a thumb drive, or both to make extra sure you'll never lose them.

8. Home Inventory

If you ever have to file a home insurance claim after a natural disaster, such as a fire or flood, your insurance company will want to know exactly what you lost and what it was worth. However, you can't necessarily rely on your memory to keep track of every single item you own. That's why insurers recommend creating a home insurance inventory, a complete list of all your belongings and their value.

There are several ways to make a home inventory. You can write down everything you own with a paper and pencil, take photos of each room and its contents, make a video of the whole house, or use an app. Whichever method you choose, store the completed inventory — either on paper or as a digital copy on a thumb drive — in your safe deposit box. That way, no matter how badly your home is damaged in a disaster, the inventory will remain intact.

What Not to Keep in Your Safe Deposit Box

Your safe deposit box obviously isn't a good place to store anything you're likely to need at a moment's notice. It also isn't a good place for important items other people might need to access, since no one but you — or your co-signer if you have one — can get into your box. And there are some things you can't or shouldn't stow in a safe deposit box because of bank policies.

Items to keep outside your safe deposit box include:

1. Cash

Unlike the cash in your bank account, cash in a safe deposit box isn't protected by FDIC insurance. It makes much more sense to keep your emergency fund in an interest-bearing savings account from an institution likeCIT Bank. In fact, some banks explicitly forbid keeping cash in your safe deposit box.

If you want to keep a stash of cash on hand for emergencies, it's better to hide it at home so that you can retrieve it even when the bank is closed.

2. Uninsured Valuables

As secure as a safe deposit box is, it's not 100% guaranteed against theft or damage — and since the contents aren't federally insured, you're out of luck if a fire or flood destroys them. So make sure any valuables you stash in your box are covered by your home insurance, and keep a list of them.

3. The Original of Your Will

In many states, banks must automatically seal your safe deposit box if you die. That can create problems if your will is locked inside. Your heirs will need to jump through all kinds of legal hoops, possibly even getting a court order, to get into the box. That will significantly delay the time it takes to get your money to your heirs.

It's fine to keep a copy of your will in your safe deposit box, but the original should go to your lawyer or executor, who can then put it in their own safe deposit box if they wish.

Pro tip: If you don't currently have a will set up for yourself, look into Trust & Will. They can help you protect your estate in just 10 minutes.

4. Letters of Instruction

The same problems that apply to wills also hold true for other estate planning documents. One example is a letter of instruction, a document that goes with your will, expressing your final wishes about your funeral and other matters.

A letter of instruction isn't a legal document, but it outlines what your family members will need to know when settling your estate. If it's locked in a safe deposit box, they may not see it until long after the funeral is over. If you have a letter of instruction, make sure it's kept with your will.

5. Advance Health Care Directive

Another end-of-life document to store outside your safe deposit box is an advance health care directive, sometimes known as a living will. This document outlines your wishes about what steps doctors should and should not take to prolong your life. However, it's only useful if everyone who needs it has access to it, which they won't if the only copy is locked away at the bank.

Instead, make sure your family and all your doctors have copies of it.

6. Power of Attorney

Along with an advance directive, many people choose to prepare a power of attorney, or POA. This document authorizes another person to make financial or medical decisions for you if you become incapacitated. Like living wills, powers of attorney should be in the hands of the people who will need them when the time comes. Keep one copy with your will, and give copies to the person or people who will hold the POA for you.

7. Anything Your Bank Won't Allow

When you sign an agreement to open a safe deposit box, it usually includes a list of items you are not allowed to store in the box. Typically, banks do not allow firearms, explosives, or any type of hazardous material. Illegal drugs, and anything else that's banned in your state, are also likely to be off-limits. Read your agreement carefully and follow the rules. If they're not clear to you, ask your banker to explain them.

8. Your Passport (Maybe)

There's one item experts disagree about keeping in a safe deposit box: your passport. On the one hand, it's a document you don't need on a daily basis, and one that's hard to replace if it's lost or stolen. But on the other hand, if you ever have to make an emergency trip overseas, you'll need your passport in a hurry, and you might not be able to get it quickly if it's locked away at the bank.

Use your own judgment to decide which concern is more important to you. If you travel abroad regularly, then it makes more sense to keep your passport in a safe place at home. But if you and your nearest relatives pretty much never travel outside the U.S., then it's probably reasonable to stow your passport in a safe deposit box for the rare occasions when you need it.

Final Word

There's one more thing you should make sure to keep outside your safe deposit box: an up-to-date inventory of what's in it. That way, if the box is ever damaged in a natural disaster, you'll know exactly what you've lost so that you can replace the missing documents or file an insurance claim for the lost valuables. And in the event of your death, this list will let your heirs know what's inside the box if they can't gain access to it right away.

David O'Brien, a financial planner interviewed by The New York Times, recommends checking your box regularly to make sure everything on your list is still inside. The loss of items from a safe deposit box is a rare event, but it's not unheard of. O'Brien says he had a relative whose bank mistakenly drilled open her safe deposit box and emptied it because the bankers got her box number mixed up with another box whose owner had failed to pay the deposit. Fortunately, because she knew just what was in the box, she was able to recover the contents.

There's another lesson in this story as well: If you have a safe deposit box, make sure you keep up to date with the payments for it. In most states, if you fail to pay the rent on your box for a long enough period, the bank is allowed to drill it open and sell off the contents to cover your unpaid fees. Keeping your payments up to date is the best way to make sure the precious items in your safe deposit box stay truly safe.