Safe Deposit Box: Do You Need One?

Do You Need a Safe Deposit Box?

A safe deposit box, sometimes referred to as a safety deposit box, is a small storage container stored in a bank's safe. People often rent safe deposit boxes to protect important documents or belongings.

Are you looking for a safe space to store some of your valuable items or important documents? Do you have sensitive information can’t be kept in your office or home? If so, a safe deposit box could be a storage solution for you. Safe deposit boxes are available to rent at most Canadian banks and credit unions.

What is a safe deposit box?

A safe deposit box, sometimes called a safety deposit box, is a small locked container, typically made of metal, offered by many brick-and-mortar financial institutions in which you can store documents or belongings. These secure boxes are designed to withstand natural disasters such as flooding and fire. They are usually located in a vault or other area in a bank that is secured by alarms and strong locks.

You can rent a safe deposit box on your name only or jointly with other people. Safe deposit boxes come in a variety of sizes based on your needs and requirements. The fee, which is usually charged annually, depends on the institution and the size of the box. Rental fees for safe deposit boxes in Canada typically start at $60 per year.

How to use a safe deposit box

A safe deposit box can be used to store different items either temporarily or for an extended period of time. They should be things that need more security or privacy than at-home storage options can provide. However, not everything can or should be kept in a safe deposit box.

Items to store in a safe deposit box

Examples of items that are good to put in a safe deposit box include:

Family documents, such as birth certificates or marriage licenses.
Property deeds and titles.
Any mortgage documents.
Financial documents.
Personal and/or business contracts.
Insurance policies.
Inventory of personal possessions.
Valuables such as family heirlooms or jewellery (though remember that the bank typically doesn’t insure the contents of a safe deposit box).
Hard drives or USB flash drives containing backups of important digital data.

Items to avoid storing in a safe deposit box

The short answer? Anything that you might need to access immediately.

Since the safe deposit box is at a physical location owned by the financial institution from which you are renting, your access is limited to business hours. That means you should think carefully before locking some items away, including:

Your passport
Original versions or only copies of your will.
Cash.
Valuables that are not insured.
Power of attorney documents.
Spare keys.
Perishables or liquids.
Dangerous items, like a firearm or explosives.
Anything illegal.

If you are unsure of what can’t go into your safe deposit box, speak to your bank or check the terms and conditions of your lease.

How to rent a safe deposit box

If you are looking to rent a safe deposit box, do your research to get the best deal. Some things to consider include the size of the box you need, how much it costs and the location. You’ll want to rent a safe deposit box in a place that you can reach easily when needed, so be mindful of the financial institution’s hours of operation.

Once you have determined where you would like to rent a safe deposit box, you can visit the branch to get help with the process.

Note that some financial institutions offer discounts as part of a bundle for its clients so it might be best to rent a safe deposit box at a bank that you already deal with.

Pros and cons of safe deposit boxes

Pros

Handy to know all your important documents and valuables are together somewhere safe in one place.
Convenient for storing anything that you don’t want family or roommates to see or have access to.
Hazard-proof storage means your items will be safe from disasters such as flood or fire.

Cons

Rent can be expensive.
Have to rely on the bank’s hours to access your items.
Not suitable for all valuables or important items.

Safe deposit box alternatives

Should you get a safe deposit box? Well, it depends. With so many documents now being online, most people may choose to store digital copies of important documents or files themselves. This can be done online via a cloud service or at home on external hard drives or flash drives.

You can also buy a secure, fireproof lockbox to keep at home for any important items. Then you can access its contents at any time and won’t have to pay an annual rental fee.

Safe deposit boxes can still be a good option if you aren’t comfortable storing important files digitally or want to store valuables outside your home; however, it is important to note that they are not insured by the bank.