15 Surprising Reasons Keeping Valuables in a Safe Deposit Box Is a Bad Idea

You can open a safe deposit box at a bank to secure your valuables. These boxes are especially popular among older adults who want to tuck away critical paperwork and other valuables. 

Unfortunately, a safe deposit box does come with some downsides, which can make them one of the ways even smart people waste money, so it’s helpful to know about these potential cons before you decide to open one up for yourself.

If you store cash within a safe deposit box, those funds aren’t insured by the Federal Deposit Insurance Corporation (FDIC) in the same way they would be if you deposited your money directly into a bank account.

FDIC-insured or NCUA-insured financial institutions traditionally offer protections against loss for up to $250,000 per person, which is why your cash is typically safer in the bank than in a safe deposit box.

When you tuck your most precious valuables into a safe deposit box, you likely don’t want anyone else to have access. In reality, banks can access the contents of your safe deposit box, especially if you forget to pay your rental fees.

In order to gain access to a safe deposit box, most banks require the person to have their name on the joint lease. Because of that, it’s unlikely that you’ll quickly be able to grant someone else access in a pinch.

Instead, you’ll likely have to head to the bank yourself to add anyone else to the paperwork, and that won’t exactly work if you need someone to visit your safe deposit box because you’re otherwise unable to.

Banks operate during banking hours, which are notoriously limited and generally fall between certain hours during weekdays. Since a safe deposit box is inside the bank, you won’t be able to access the contents unless the bank is open.

If you were planning to write off your safe deposit box rental fees on your tax return, that’s no longer an option. 

Instead, you’ll pay full price without any tax write-off opportunities. While that may not be a deal-breaker on its own, it’s something to consider if you’re already having second thoughts about opening one up.

If you plan to store valuables in your safe deposit box until you pass away, that could create a headache for your heirs. 

Even if you provide your executor with a key and express permission to open the safe deposit box, bank rules could make it a hassle for anyone but you to gain access.

Most financial institutions limit what kind of items you can store in a safe deposit box. Generally, you can’t store anything illegal or perishable within the box. 

And, as we have already mentioned, you really shouldn’t store anything in there that you’ll need in a hurry, like an original copy of your power of attorney.

While you might be storing your items in a safe deposit box to avoid a possible theft at home, banks aren’t immune to robberies. In the worst-case scenario, your items might be stolen from your safe deposit box.

Many banks cooperate with law enforcement officers who request access to safe deposit boxes as part of an investigation. Depending on the situation, law enforcement might be able to confiscate the items in your box.

If the bank is damaged during a flood, fire, or other natural disaster, the contents of your safe deposit box will likely be lost. Of course, this could happen at home too. 

But, if your valuables are at home, you may have an opportunity to gather them ahead of your evacuation.

If the bank fails, a government agency often takes over without any warning. After the takeover, there might be a freeze on banking activities, including accessing your safe deposit box. Depending on the situation, the lack of access could extend for months.

Like we’ve already mentioned, If you want fast access to your valuables, a safe deposit box isn’t the right solution. For getting your items quickly, a home safe might be a better fit. 

After all, opening a safe deposit box involves a trip to the bank within banking hours, which isn’t always a fast errand to run.

If you store estate planning documents — like your final will or power of attorney — within a safe deposit box, they essentially remain inaccessible to your heirs. 

Not only would your heirs need to know about the safe deposit box and have a key, but they would also need to be named as joint renters of the box to access the documents without a hassle.

Unfortunately, a lack of access to the right documents could complicate your estate plans.

Since most people don’t need access to their passports every day, you might choose to store them in a safe deposit box. 

But if you need to leave the country for an emergency visit, keeping your passport stored in a safe deposit box could stall your plans because you’ll be unable to head to the airport unless your bank is open for business.

If you choose to store family heirlooms like jewelry in a safe deposit box, the potential for loss exists. The bank might close or your heirs might lose access to the box. An unfortunate incident could mean a lost heirloom for the next generation.

A safe deposit box might seem like the perfect place to store certain valuables, but it’s critical to weigh the risks before jumping into this arrangement.

As you assess your options, you should also check up on your financial health to make sure you are putting your assets to good use. 

For example, are you better off keeping your money tucked away in a safe deposit box, or should you put it into a high-yield bank account where it would have the chance to grow over time? 

These are important questions to ask before you head to the bank to take out a safe deposit box for yourself.