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Tips on Safe Deposit Boxes

June 11th, 2009 · 21 Comments

I found this interesting post on Canadian Money Forum offering useful tips on safe deposit boxes and home safes. I’m reproducing it below with the permission of the author of the post (thanks George):

  1. Safe deposit boxes aren’t always tax-deductible. You need to use the box to manage your investments (i.e. as a place to store a stock certificate or savings bond) in order for it to legitimately qualify as a deduction.
  2. Home safes face three major threats: fire damage, water damage, and theft. Unless you spend a LOT of money, it’s very difficult to find a safe that has a high amount of protection against all three threats.
  3. Many “fire boxes” are good against fire but not against a thief, since the thief could just take the whole thing and crowbar it open later.
  4. Many good-quality safes can be bolted to the floor and are difficult to break into, but provide limited protection in the event of a fire.
  5. A tubular floor safe provides extremely good protection against both fire and theft, but must be installed directly into concrete in a basement and can be vulnerable to flood damage.
  6. Fire-proof boxes are generally designed to keep internal temperatures low enough so that papers won’t burn. Computer discs and hard drives will be destroyed at a much lower temperature. If you’re planning to store any sort of computer media, make sure you get a safe/box that is rated for that type of use, or just put the drive/disc in a safe-deposit box, where fires aren’t a big concern since banks are protected by sprinkler systems.
  7. One last thought – items that require last-minute access should NOT be stored in a safe-deposit box if possible, because you’ll only have access to them when the bank is open. Examples of items that are better stored in a home safe: Wills and funeral arrangements, passports.

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21 responses so far ↓

  • 1 George // Jun 11, 2009 at 12:21 pm

    I had a weird case of deja vu this morning… I seem to remember reading those words before. :-)

    Glad you could make use of them on the blog, CC.

  • 2 Michael James // Jun 11, 2009 at 12:41 pm

    That’s a good list of things to consider with safes and safe deposit boxes. An 8th item is to do your best to own as few things as possible that need this level of protection :-)

  • 3 Cam Birch // Jun 11, 2009 at 12:52 pm

    Excellent advice. When looking for an in-home safe I considered all these items. I now have a nice, super heavy, water proof, fire “proof”, bolted down safe. It is even temp rated to protect cds.

    The only problem I had with finding a safe was price, and reading the fine print. Just because a safe says something on the box doesn’t always mean what it appears to say. For example my safe is “media safe”, which means cds/dvd, not hard drives.

    I believe everyone should have at least a simple safe at home (for some fire protection) and if you have anything that really should be in a safe, you should have a safty-deposit box. Just don’t pick a terrorist target :) , otherwise its safer at home.

  • 4 Canadian Capitalist // Jun 11, 2009 at 12:53 pm

    @George: Thanks again for the permission to reprint it here. Sometimes, a gem of a post gets buried in all the discussions on a Forum and glad to highlight them on the blog. It also gives me a break :)

    @Michael: Good point. Personally, we only have a safe deposit box at the local bank. One point I’d add is to buy a passport drive to keep all the pictures and put in a different place such as the office or even a bank safe deposit box. If, God forbid, the house burns down, the memories will be safe. I personally intend to do this.

  • 5 Jamie // Jun 11, 2009 at 10:26 pm

    Good point on #6. I used to work in an office where we backed up all data on an external drive and kept it in a “fire-proof” safe that was only rated to protect paper. We had security consultant do an audit of our processes and he pointed out that the hard drive would melt if we ever had a fire. Off-site backups started that night.

  • 6 Jamie // Jun 11, 2009 at 10:28 pm

    For #1, would a safe deposit box qualify if you used it to store gold bullion or rare coins?

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  • 10 Joe // Jun 12, 2009 at 9:53 am

    One other thing to consider when buying a fireproof safe is impact rating–many safe failures occur because a safe stored on the top floor survives the fire, but cracks when it drops 3 floors into the basement when the house collapses.

    http://www.fireproofsafes.com/faq.cfm

  • 11 George // Jun 13, 2009 at 2:17 pm

    @Joe: The best place to store a safe is in the corner of a basement, for a couple of reasons:

    1) If a thief breaks into your house, searching the basement isn’t usually their first priority. Bbedrooms and living rooms tend to be more likely spots for valuables.

    2) If there’s a fire, there’s no chance of the safe being damaged by dropping, and the temperature in the basement should stay (relatively) cool – heat rises, after all.

  • 12 Cam Birch // Jun 13, 2009 at 3:38 pm

    @George: If you are placing a safe in the basement you should also ensure you have a water rated safe. Since fires are fought with water you will likely have 1-2 feet of water in the basement once a fire has been finished.

    Quality safes are drop rated. There are 2 ratings commonly used 15 feet and 30 feet. Basically 1 or 2 stories. The rating means that the safe has been burned for the entire fire rating period, then dropped and did not burst open, also the rated contents were then retrievable.

    I like the idea of storing the safe in the basement, I have found that if the safe is not reasonably accessible I personally will not use it. My safe is over 500 lbs so I feel reasonably comfortable with the unlikelyness of someone trying to steal it (plus a home alarm…). If I don’t use the safe for valuable documents (the number 1 reason for a safe) I might as well not have one.

  • 13 Anon // Jun 15, 2009 at 7:07 pm

    1-Your will should be in your bank’s safety deposit box, not at home unless you are sure no one will contest anything (ie: it may “disappear”). Plus if you die in a fire your will is toast. Ideally have your notary make two official copies, one in the bank, one at home.

    2- Storing hard drives in a safe is a sure way to lose data. After a medium-while of sitting there unused, the bearings will seize and it will be unusable. Use USB sticks, CDs, or DVDs. Even those may only last 5-7 years. Ideally you constantly use “rolling backups” and large parity files.

    3- Put your safe in your basement, elevated on 2 feet of bricks. Put DVDs, etc in ziplock bags. Papers: who cares if they get wet.

  • 14 George // Jun 15, 2009 at 7:54 pm

    @Anon: Regarding your third point, I care if my papers get wet. Try taking your favorite book and soaking it in the bathtub overnight, and see what kind of shape it’s in the next day…

  • 15 Cam Birch // Jun 15, 2009 at 8:13 pm

    @Anon, unless you have a proper heat rated safe anything plastic will be a blob of plastic afterwards. DO NOT try to extra protect important documents or other stuff, you will be VERY sorry when they are destroyed due to your protections.

    Try throwing a CD/DVD into an oven at 350F and see how they fair. That is the rated max temp in a fire rated safe. A media rated safe will keep the temp much cooler, yet still hot enough to melt photographs.

    Never store anything in a safe that the safe does not explicitly state will be ok. Otherwise you will have problems.

    Keep copies of all important documents. I recommend 3 copies min. 1 in your filing cabnet, 1 in your safe, 1 in your saftey deposit box. For “things” like jewelry, get insurance. Irreplaceable stuff like photographs you need to get copied and store them in a few locations to ensure sufficent protection.

    To ensure 100% protection of your valuables you need to be very paronoid. Or just decide what you can live without and cut back a little bit. Peace of mind is worth a lot of money, unless of course you don’t have it, then you just have to make due with what you can scrape together.

  • 16 Anon // Jun 16, 2009 at 3:48 pm

    Keeping 3 copies of important documents or data is very smart.

    DVDs should be in ziplock bags. If it’s hot enough to melt the bag, the DVD would be melted too. The bag protects against water. Anyways, you should store copies in at least two places (eg: home and bank, or home and parent’s house).

    Paper: if your “paper” is a rare first edition of Darwin’s Origin of Species, then yes it should be in the bank. If it’s just official papers (money, passport, birth certif.) then getting it wet is no problem. It retains all value when dried.

  • 17 Cam Birch // Jun 16, 2009 at 6:39 pm

    @Anon, why would you keep a piece of plastic in a cheap plastic bag? You can store DVDs in a bucket of water without damage so why are you protecting them from water damage?

    A ziplock back will melt at a much lower tempature than a DVD. Causing a case where your protection causes more damage than it stops.

  • 18 Anon // Jun 16, 2009 at 10:59 pm

    Ziplock melts at 90C. If your non-media rated safe is in a fire, your DVDs and USBs are toast no matter what.

    Putting DVDs and USB sticks in water is not a good idea, as water dries and leave marks which will scatter the reading LASER, or will corrode USB sticks. So you might as well put them in a water tight bag and rely on off-site backup in case of fire.

  • 19 Cam Birch // Jun 17, 2009 at 12:32 am

    @Anon, the problem is the target tempature in a media safe is 177C. Below this tempature media such as CD/DVD and USB flash is expected to be recoverable. Paper does not combust until over 240C.

    If your bag isn’t tempature rated to last until above 177C then you are creating a failure situation where you have destroyed your media while trying to protect them.

    For reference:
    ETL fire rating spec: http://www.sentrysafe.com/products/testingAndStandards/media.aspx

    The moral of the story is store stuff where it is ment to be stored and don’t provide extra protection unless it is designed for that purpose. If you are worried about water, then buy the proper safe, or store it in a Safe Deposit Box.

    DVDs and such are not good long term storage anyways, use Google Docs, or another offsite backup solution for any backup that actually matters to you.

    Lifespan of CD-Rs 5-10 years (organic failure)
    Lifespan of DVD-Rs 5-10 years (also organic failure)
    Lifespan of Blu-Ray 50-100 years (all metal).
    All of these media items slowly degrade and fail, always duplicate and backup again all precious CDs, DVD periodically. Top end media (not discount brands) can add 5 or more years to the lifespan of a CD or DVD.

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