10 Surprising Things You Didn't Know About Safe Deposit Boxes

Still popular among older adults, safe deposit boxes aren’t theft-proof — and some items cannot be stored in them

Nicole Pajer,

AARP

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Published November 21, 2024

Sarah Rogers (Getty 1)

Michele Treacy, 60, and her husband Patrick have kept a safe deposit box at their local Bank of America branch for 20 years. “We store all sorts of vital documents – birth certificates, wedding license, mortgage docs, car titles, will and living trust docs,” Michele says. They’ve always had peace of mind knowing their important paperwork was safely stored and accessible.

But during the pandemic they each lost parents, Michele’s father in 2020 and Patrick’s mother in 2021, and had a hard time accessing their parents’ wills in their safe deposit box. “Both times I had to call [the bank] to request to have someone meet me at the closed branch so I could get access to the necessary documents,” Michele recalls. “It was time consuming and a hassle during a difficult time.”

Then, when their branch in Lincoln Park, New Jersey closed and failed to reopen post-pandemic, their box was relocated to a branch 10 miles from their home, which Michele says has been inconvenient. The couple also noticed a steady rise in rental fees throughout the years, although being “platinum customers” they have been offered discounts and pay $139 annually for a small box.

Because of the higher fees, the duo has decided to cancel their box. “We are going with a secure fire-proof and flood-proof home safe from now on,” Michele says.

The Treacys aren’t alone in discovering surprising aspects of safe deposit boxes. And despite perceptions that they’re a dying breed, there are still over 20 million safe deposit boxes in the U.S., estimates Dave McGuinn, president of Safe Deposit Specialists, a financial consulting firm based in Houston, Texas.

Whether you currently rent one or are considering getting one, here are 10 things to know about safe deposit boxes.

1. The contents are not insured

The Federal Deposit Insurance Corporation (FDIC) defines a safe deposit box as a “storage space provided by the bank.” Therefore, any contents inside are not insured by the government agency if damaged or stolen. And unfortunately, financial institutions don’t insure the contents either.

“The contents are not protected by FDIC insurance, so if the bank is involved in a natural disaster or terrorism attack, you may lose your valuable contents with no way to recover their value,” says Jaclyn Roberson, a senior partner at Roberson Duran Law in San Antonio, Texas.

The only way to insure the contents is to take out a separate insurance policy. This can typically be set up as a rider to your renter’s or homeowner’s insurance. The premium is calculated based on the appraised or estimated value of each item. “I've also heard that some insurance companies will discount and lower the premium because the items are secured in a vault and not inside the renter's home,” says McGuinn.

2. You can’t grant someone access in a pinch

As an estate planning and probate attorney, Roberson deters clients from storing their original estate planning documents in a safe deposit box. “Sure, it seems like a relatively safe place to hide important paperwork, but if your designated executor or agent needs to access those documents, the bank will deny them access if they are not the person who leased the safe deposit box,” she explains. Even if this person is given the key and passcode, many banks will still deny access if their name is not on the safe deposit box lease as a joint renter, she warns.

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“Depending on your jurisdiction, the only way to gain access to a safe deposit box is to petition the court for an order that grants access to the box,” says Roberson. Still, some state laws may limit who can take possession of the items. “Here in Texas, with limited exceptions, the bank can only give the will to a court representative who may then only file it with the clerk of the court,” Roberson says.

3. Banks can drill and open unpaid boxes

“If rental fees go unpaid for a certain period, banks may drill the safe deposit box open and transfer its contents to the state’s unclaimed property division,” says Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors in Manhattan Beach, California. In this instance, you could be held reliable for any unpaid fees, penalties and drilling costs.

A bank might also drill into your box if you lose your key. “You'll be charged for this service, so it's wise to keep track of your keys carefully,” explains Jeff Ketelaars, co-founder of Security Guards Only, a company that provides trained security personnel to protect properties, assets and individuals across North America and the UK.

4. You can’t access your safe deposit box 24/7

The FDIC recommends customers avoid storing anything in a safe deposit box that they might need to access outside of their bank’s regular hours, such as passports or credit cards. “Similarly, if there is a natural disaster your access to the box may be restricted, so consider whether you want to keep things locked up that you might need in an emergency,” says Schulman.

5. Rental fees are generally not tax deductible

“Contrary to popular belief, safe deposit box rental fees are generally not tax deductible,” says Schulman. Prior to 2018, these fees could sometimes qualify as a miscellaneous itemized deduction if the box was used to store income-producing items, such as investment documents or property papers. But the Tax Cuts and Jobs Act of 2017 eliminated the deduction for tax years 2018 through 2025. (The deduction suspension could be lifted in 2026.)

However, there may be exceptions depending on your situation. If you are self-employed and use the safe deposit box exclusively for business purposes, or you can prove it’s a necessary business expense, the rental fees could be tax deductible. “In these cases, you might be able to deduct it as a business expense on Schedule C,” says Schulman. “Always consult with a tax professional for advice specific to your situation, as tax laws can change and individual circumstances vary,” he adds.

6. They can be difficult to access after you pass away

Safe deposit boxes often have restricted access after the owner’s death, says Schulman. When the person passes away, the box is typically sealed until the probate process begins. That can result in family members not having immediate access to important documents like wills, durable power of attorney, insurance policies or medical directives.

Schulman suggests safe deposit box owners grant a trusted relative or executor joint access or store copies of essential documents elsewhere.

7. Some items are off-limits

Explosives? Drugs? Firearms? Just because you rent a box doesn’t mean you can put anything you want in it, as banks often have rules restricting certain items.

Bank of America, for instance, prohibits “storing liquids of any kind, intoxicating liquors, drugs, perishable goods, cremated remains, narcotics, firearms, ammunition, weapons or any other dangerous instruments or property of an explosive, hazardous or destructive nature.” Wells Fargo’s safe deposit box restrictions include “items with excess weight and/or items that we believe may injure our employees, customers or premises or interfere with the operations of the safe deposit box area.”

8. They aren’t theft-proof

There is the potential that your safe deposit box could get broken into during a bank robbery. “I've worked with many banks that have had burglaries where the individuals have broken into the safe deposit vault, either through the roof or the walls, and once they get in there it doesn't take that long to start busting those boxes open,” says McGuinn.

Before renting a safe deposit box, McGuinn suggests asking the bank about their security measures. The most important question to ask, he says, is whether the bank leaves customers in the safe deposit vault by themselves. “If they're doing that, don't even think about having a box rented there,” McGuinn cautions. For an extra layer of protection, consider opting for a bank that has a separate viewing room where customers can open their safe deposit boxes.

9. Banks don’t always guarantee privacy

While safe deposit boxes are private by nature, law enforcement may be able to access your box with a court order. McGuinn recalls an instance in California where law enforcement agencies used a court order to open around 1,500 safe deposit boxes, confiscating the belongings inside due to a tip that there were illegal drugs stored in them. The customers were eventually able to claim their belongings, but McGuinn said it was a huge pain. “They had to file a class action lawsuit,” he says.

Moreover, banks can flag safe deposit boxes for activity that they deem suspicious, like if an owner visits their box frequently.

10. Some banks are phasing out safe deposit services

A Houston-based credit union recently instructed over 5,000 of its nationwide branches to stop offering safe deposit box rentals and announced they would not be installing new boxes in any branches. Installation expenses, low income from rental fees, employee training requirements, lawsuits over access and the unlimited liability that exists when offering this service are among the many reasons banks make these decisions, says McGuinn.

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