Why use a home safe

Why it Makes Sense to Have a Safe and a Safe Deposit Box

By Mike Peterson
In October 14, 2016

I’ve written several blogs about things like the benefits of changing your passwords, how to avoid ID theft, and other topics related to online security – and there’s a good reason for that: There are a TON of scammers out there who are all too ready to skim and scam their way into your online accounts.

As life becomes increasingly digital and virtual, it’s all too easy to forget about the physical things that need security – things like important personal and financial documents, valuables, and so on. These items are vulnerable to real-world threats like house fires, burglars, or floods – and it takes more than a well-crafted password to keep them safe.

When it comes to protecting your valuables, you’ve got two options (and hiding them under your mattress is definitely not one of them!). You can store them at home in a sturdy and secure fireproof safe, or you can take them to your bank or credit union and stash ‘em away in a safe deposit box. But which option is better? And why?

That depends on the item — is it something you’ll need to access regularly? Is it something that other people will need to access? Is it something that you need covered by insurance?

My recommendation? I think it’s best to have a fire/waterproof safe AND a safe deposit box – and you can use the following guide to decide which items go where.

Safe Deposit Box: High Security, Limited Access

In the movies, a safe deposit box is generally where glamorous, super-wealthy people store piles of sparkly diamond necklaces or the titles to their private islands. In the real world, safe deposit boxes aren’t quite as exciting — but they are very practical for storing certain personal documents and valuables.

What’s good about safe deposit boxes: They’re secure, they’re locked, and they’re off-site. So even if, say, your home is destroyed in a fire or a tornado, the items in your safe deposit box are likely to be unharmed. Plus, only the people listed as owners – or in official banking lingo as “tenants” or “lessees” – are permitted to access the box.

What’s not so good about safe deposit boxes: Limited access. You only have access to your stuff when the bank is open for business. Another drawback? Unlike your checking and savings accounts, your safe deposit box is not federally insured. If the bank catches fire and your safe deposit box is destroyed, your items are not covered – so make sure you talk to your insurance agent about adding your safe deposit box to your homeowner’s or renter’s insurance policy.

Also, you have to pay for a safe deposit box. Most banks and credit unions charge an annual fee. The fee isn’t super-high (in most cases, you’re looking at under $30 per year), but it is something to consider.

What you should keep in a safe deposit box: Safe deposit boxes are ideal for valuable things that you’re sure you won’t need to access regularly or on short notice. Consider a safe deposit box for items like:

  • Birth certificates (original copies)
  • Marriage certificates (original copies)
  • Divorce papers (original copies)
  • Rare/valuable coins
  • Insurance paperwork
  • Valuable jewelry (but only if you don’t wear it often!)
  • Family photos (or digital copies of family photos)
  • The deed or title to your home
  • The deed or title to any property you own
  • Your passport (but only if you don’t travel often!)
  • Cash (remember, your bank accounts are federally insured – your safe deposit box is not).

A couple of final words about safe deposit boxes: You should never, EVER store a will or a living will in a safe deposit box. If something happens to you, getting into your safe deposit box without you will be very difficult for your loved ones (in fact, some states go as far as sealing safe deposits for a certain amount of time after a person dies).

Also, it’s good to keep in mind that, although they are very secure, safe deposit boxes are still vulnerable to natural disasters like floods. It’s a good idea to keep documents in plastic bags for an extra layer of protection.

Fireproof/Waterproof Safe: In-House Peace of Mind – With a Few Exceptions

Most hardware stores sell fireproof safes in a range of sizes and price points. You can get a safe the size of a lunch box or a mini refrigerator, and you can spend under $30 or well over $100. Although they vary in quality, most of these safes offer some protection against water damage and fire, which means that your valuables are more likely to survive a natural disaster.

What’s good about a safe: Unlimited access, for one thing. Because your safe is stored at home, you can access it any time you want: early mornings, late nights, weekends, holidays – you name it. Another benefit: No annual fees to store your stuff. Your safe is, well, yours.

What’s not so good about a safe: Safes don’t offer 100% protection. For example, although they may not burn, items stored in a fireproof safe are still vulnerable to heat damage. And, if your house is swept away in a flood, hurricane, or tornado, your safe will be swept away with it.

What you should keep in a fireproof/waterproof safe: Important things you use often or that you might need on short notice, such as:

  • Credit cards that you don’t carry with you
  • Information about your debts (including the name of the lender, the amount you owe, your monthly payments and due dates, etc.)
  • A list of all of your current passwords for online banking, credit cards, etc.
  • Insurance policies
  • Your social security card
  • The title to your car(s) and extra car keys
  • A list of your doctors and any medications you need to take
  • Your will
  • Your living will
  • An inventory – with photos — of all the items in your safe deposit box
  • The key to your safe deposit box
  • Jewelry that you wear regularly
  • Your passport (if you travel often)
  • Photocopies of important documents like birth certificates, marriage licenses, and the like (it never hurts to have a spare)

A few things to keep in mind about a safe: Remember that even a fireproof safe doesn’t protect against heat damage (this is something to keep in mind before you store, say, a thumb drive containing the only copy of your valuable family photos). Also, remember that, unlike a safe deposit box, a safe can be accessed by anyone who gets their hands on the key or combination, and could possibly be removed from your home by a thief in the event of a burglary.

Hope this helps you ensure that your personal information stays safe and sound! And remember, if you need debt advice or have questions about debt, credit, or credit cards, you can always reach out to Debt Guru.  Contact the Debt Guru team today for a free debt consultation.

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.

Click "More" for important American Credit Foundation client transition information