Most of us think that one of the safest places to store our valuables is in a safe deposit box in a bank. Who can blame anyone for thinking this – banks after all, have the best 24 hour security and alarm systems. However, recent tragedies such as the natural disaster of Hurricane Katrina and the 9/11 attack on the World Trade Center brought to light that a safe deposit box may not be the safest place to hide your cash! In both of these terrible tragedies, hundreds of people’s safe deposit boxes and their contents were destroyed irretrievably.
To add insult to injury, the contents of a safe deposit box are seldom insured. The only thing that can indemnify your belongings is, of course, your homeowners insurance policy. But, the caveat is – you are not supposed to be hiding cash in a safe deposit box, and thus, it is not insured. Sadly, many people found this out the hard way in the two tragedies mentioned above. The FDIC (or CDIC in Canada) only insures the deposits in accounts held in banks, but not the contents of safe deposit boxes!
With the current unprecedented global economic crisis, it is becoming obvious that more and more people are desperately searching for ways to safely hide their cash and valuables. What makes this even more tense is that banks are failing daily. A recent 2008 Pennsylvania Department of Revenue survey of 687 safe deposit boxes found that 172 had “cash or coins.”
More cautions against hiding your cash in a safe deposit box are:
- In the United States, the U.S. Department of Homeland Security could get a warrant to access your safe deposit box if the bank tips them off due to what they might perceive as “suspicious activity”, which could literally be anything, like too many regular visits. Other nations likely have similar legislation.
- The often abusive IRS can often freeze assets merely based on suspicion of probabilities, until the courts clear the accused.
Things to keep in mind when storing valuables in a safe deposit box:
- Read your homeowner’s insurance policy and if in doubt, get legal advice on any ambiguities.
- Read the safe deposit box contract thoroughly!
- Take photographs of all of your valuables and place them in waterproof plastic bags, even multiple layers to keep the elements from doing damage to them, should natural or man-made disaster strike. Bank vaults are normally designed to be fireproof, but not waterproof, so if you are in a flood prone area (like the Red River in the Dakotas) you might want to think about this.
- Do not store original copies of documents you require immediate access to, such as receipts, wills, funerary directives, etc.
- Find an alternative to hiding money or valuables in a bank.
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