PROBATE CORNER
Safe Deposit Boxes – Are They Safe ?
DAVID M . GARTEN
There are an estimated 25 million safe deposit boxes in America . The physical protection of a bank vault , plus a system of access requiring two keys kept by the customer and the bank , would seem to provide a great deal of security . Yet , safe deposit boxes are not as safe as they may seem . An article in the New York Times , July 19 , 2019 , reported 44 robberies in the preceding five years related to safe deposit boxes . Even worse were numerous bank errors in which boxes were moved , misplaced , drilled open , or closed by mistake . For example , a large Maryland bank closed several branches and lost hundreds of safe deposit boxes . safe deposit box is not a deposit account . It is storage space provided by the bank , so the contents , including cash , checks or other valuables , are not insured by FDIC deposit insurance if damaged or stolen . Also , financial institutions generally do not insure the contents of safe deposit boxes . If you want protection for the valuables in your safe deposit box or home safe , talk to your homeowner ' s or renter ' s insurance agent about adding coverage under these policies . " And unlike money in a savings account , money in a home safe or safe deposit box cannot earn interest , so the purchasing power of your cash will decrease ," said Reynolds . Also read the terms of the safe deposit box rental agreement , as the bank may limit what you can keep in the box . These limitations could include cash .”
Banks offer safe deposit boxes as a service to customers and may not insure the belongings in the box . For example , Wells Fargo ’ s safe deposit box contract states that the contents of the safe deposit box are not insured by Wells Fargo or the FDIC . Citigroup limits it ’ s liability to 500 times the box ’ s annual rent . And JPMorgan Chase has a $ 25,000 ceiling on its liability . Bottom line – insure the contents of your safe-deposit box . A rider on their homeowner ' s policy can add safe-deposit box insurance at a rate that is far less than the cost of insuring valuables that are kept in your home .
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The FDIC insures only deposits in accounts at insured institutions . Safe-deposit boxes are considered storage space provided by the bank and do not fall under the insurance laws . In a FDIC Consumer News article entitled Five Things to Know About Safe Deposit Boxes , Home Safes and Your Valuables , - Winter 2018 , the author states : “ You ' re better off stashing your cash in a bank deposit account , like a savings account or certificate of deposit , than in a home safe or a safe deposit box . Among the reasons : " Cash that ' s not in a deposit account isn ' t protected by FDIC insurance ," noted Luke W . Reynolds , Chief of the FDIC ' s Community Outreach Section . That ' s because , by law , the FDIC only insures deposits in deposit accounts at insured institutions and only in the rare instances when a bank fails . A
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