A safety deposit box is a tool you can use to protect some of your most valuable possessions. In fact, banks offer safety deposit boxes clients can use to store almost anything important. However, not all items belong in a safety deposit box.
What Is a Safety Deposit Box?
A safety deposit box is a locked storage locker you rent from the bank. To rent a safety deposit box, you must typically pay an annual fee.
The bank will then issue you a key that you can use to open the box. Some common items stored in safety deposit boxes include financial documents, insurance policies, titles, property deeds, expensive jewelry and family heirlooms.
Putting Cash in a Safety Deposit Box
Many people are tempted to keep cash in a safety deposit box in order to reduce the risk of theft. However, this is not generally recommended for the following reasons:
- You lose money – When you choose to keep cash in a safety deposit box instead of depositing it into your checking or savings account, you miss out on any interest you would have earned.
- The IRS may be suspicious – Putting cash in a safety deposit box sometimes leads to legal problems, as the IRS may suspect that you are trying to hide money.
At this time, it is not illegal to put cash in a safety deposit box. However, because of these issues, many banks have policies that prohibit you from doing so.