What Is a Safe Deposit Box?

A safe deposit box (or safety deposit box) is an individually secured container—usually a metal box—that stays in the safe or vault of a federally insured bank or credit union. Safe deposit boxes are used to keep valuables, important documents, and sentimental keepsakes protected. Customers rely on the security of the building and vault to safeguard their contents.

How Safe Deposit Boxes Work

When you rent a safe deposit box, the bank gives you a key to use, in tandem with a second “guard key” held by a bank employee, to access the box. If your bank uses a keyless system, you will scan your finger or hand instead. Either way, you will have to provide some type of identification—and your key, if it’s not a keyless system—every time you visit the bank to access the box.

An individual can rent a box in their name only, or they can add other people to the lease. Co-lessors on a safe deposit box will have equal access and rights to the contents of the box. For example, people who have an addiction, financial, marriage, and/or judgment issues may not be ideal candidates. 

Some institutions allow access to be set up so that both (or all) lessors must be present to open the safe deposit box. Experts recommend designating someone with power of attorney who can access the safe deposit box.

Safe deposit boxes are a good place to keep your hard-to-replace documents—such as contracts and business papers, military discharge papers, and physical stock and bond certificates—along with small collectibles and family heirlooms. Keep in mind that the largest safe deposit boxes are usually just 10 inches by 10 inches and two feet deep. Good things to store in your safe deposit box are important items that you won’t need frequent access to, including:

• Personal papers, such as original birth certificates, adoption papers, marriage licenses, and citizenship papers.
• Copies—but not the only copies—of wills and powers of attorney.
• Military records and discharge papers (e.g., ).
• School transcripts and diplomas.
• Sensitive documents you would not want roommates, children, relatives, and visitors to stumble across.
• The deed to your house, along with any car titles.
• Paper stock and bond certificates (including U.S. savings bonds), if you have any (most are issued electronically these days).
• An inventory of your home’s contents in case you need to file a claim with your homeowner’s insurance policy.
• Important business papers and records.
• Important contracts.
• Hard drives and flash drives with backups and important data.
• Financially and/or sentimentally valuable jewelry, collectibles (such as coin or stamp collections), and family keepsakes.
• Other documents or small items that would be difficult or impossible to replace.

Advantages and Disadvantages of a Safe Deposit Box

Safe deposit boxes are undoubtedly more secure than most people’s homes. Bank vaults, of course, are harder to break into and are located in secure areas with alarms, video cameras, and top-notch locks. They’re also reinforced to withstand fire, floods, hurricanes, tornadoes, and other natural disasters.  Although safe deposit boxes are designed to withstand natural disasters, it’s a good idea to put anything that could be damaged by water in a waterproof container, such as a zippered plastic bag, to add another layer of protection. 

It’s best to store items in a safe deposit box that won’t be needed in an emergency. Passports, medical directives, the only copies of wills, and powers of attorney, among other documents, are better kept in a secure spot, such as a fireproof home safe. You’re better off keeping the following items out of your safe deposit box:

• Passports
• Only copies of living wills, advanced medical directives, and durable powers of attorney
• Valuables you have not insured
• Cash
• Anything illegal

It's also unwise to store cash or similar investments in a safe deposit box. Since these won't be earning interest, you would actually be losing money due to the bank's leasing fees. To get the most out of your money, you consider looking for the best high-yield savings accounts.

The contents of a safe deposit box are not insured in the same way as a bank or credit union deposits. The Federal Deposit Insurance Corporation (FDIC) insures cash deposits up to a certain limit but, due to the fact that there is no way to verify the contents of a safe deposit box, banks will not insure their contents. Also, if heirs are not told about the location of the drawer, upon non-payment the box is considered abandoned, and its contents are turned over to the state’s unclaimed-property offices for auction.

Special Considerations

Safe deposit boxes have been offered by banks for some 150 years—with various other types of safekeeping offered long before that. However, fewer people today are renting safe deposit boxes, opting instead for digital storage and home safes.  This can make it easier to find an available box—or more difficult if your bank no longer offers them. Betty Riess, a Bank of America spokeswoman, said demand for boxes has dropped “significantly,” especially among younger customers who are more likely to rely on digital storage. According to Riess, fewer than half of her company’s safe deposit boxes are rented. Some banks now offer the boxes for free depending on the type of account and your balance.

The Bottom Line

Safe deposit boxes are an additional service offered at some banks. For an annual fee, customers can rent a box to store their valuables and important documents in the bank's vault. But this protection is not absolute: unlike regular bank accounts, safe deposit boxes are not insured or protected by federal regulations.