The end of bank safe deposit boxes: what you need to know
As many banks phase out safe deposit boxes, what other options are there for valuable goods?
Several high street banks have stopped providing safe deposit boxes, potentially putting valuable and expensive items at risk.
Customers who rely on these boxes to keep treasured pieces safe are now left with few options to make sure these items are protected.
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The end of deposit boxes
Safe deposit boxes can be used to store expensive items and until recently most banks provided them to current account holders for a yearly fee.
But because of cost-cutting measures they are now being phased out by many.
Barclays, for example, has started withdrawing the boxes from branches and they’ll all be gone by the end of the year. Barclays has written to customers and given them six months to clear out the boxes.
The bank blamed storage issues for the decision and said the scheme had become complex and costly.
Other banks, such as Lloyds and NatWest/RBS, were slightly less abrupt and just shut the scheme down to new customers.
The Co-op has also stopped this service while HSBC says it only has around seven branches (out of 1,189) which offer the lockers. At Santander and Nationwide this has never been an option.
Extra security
Safe deposit boxes can be used for anything valuable, such as artwork, legal documents or jewellery and are stored in a bank branch. Often they are used to store collections of jewellery which are handed down through families, particularly in Asian communities.
It’s a much safer way to store expensive items as the boxes, or lockers, are kept in the bank under CCTV and behind a thick metal door. Customers are then given a set of keys, or sometimes a swipe card, and can access the contents of their box when they want (during working hours).
Although anything can be held in the box, customers will need to sign a document stating it doesn’t contain anything illegal, such as drugs, guns or laundered money.
The contents also need to be covered in the customer’s home insurance policy.
The banks still offering security lockers
Metro Bank is one of the only banks to provide these deposit boxes, which it says customers made clear they wanted. There are five different sizes available, which range from £120 to £480 a year, and each box has two keys – one for the customer and one for the bank.
Craig Donaldson, CEO for Metro Bank, explains: “We’re committed to offering our customers the very best in service and convenience, and the fact that they want somewhere to keep their valuables, means that we’ll keep on building safe deposit boxes. It’s as simple as that."
State Bank of India also provides the boxes in five of its ten branches in the UK and they cost between £125 and £250 a year.
The right insurance
Wherever you keep your valuable items, you need to make sure they’re insured. Valuable items will need to be listed on your home insurance policy and will come under the ‘personal possessions' cover.
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The value covered varies between insurers. But eSure, for example, will cover up to either £10,000- or £20,000-worth of valuables. Any items over £1,500 will need to be listed.
As well as insurance you’ll also need to keep hold of documents such as: the original purchase receipt, if you have one, a valuation, certificate of authenticity, original box, and photos of the items.
Some insurers, such as eSure, Aviva and Direct Line, will also give you a discount if your goods are held in a safe deposit box because they’re seen as more secure, but you’ll need to tell them if you take the items out of the box.
Luke Parker, underwriting manager at Direct Line home insurance, explains that for pieces which are removed, cover can be agreed for a short period, typically up to 14 days for items of jewellery up to a value of £20,000, and the insurer may charge a small additional premium to do so.
"Items regularly taken out of the bank, for example every weekend, are generally not accepted unless a customer has adequate security at home to protect the items at risk. If you have any items of high value, the best advice is to speak to your insurer," he adds.
Other alternatives
Most of the banks still offering safe deposit boxes only allow current account holders to sign up so they won’t be an option for everyone.
There are many private companies offering the same service, but the prices vary wildly. These are also a lot more expensive but often guarantee to cover goods up to a certain value if stolen. Metropolitan Safe Deposits, for example, charges between £132 and £2,180 per year and includes cover with Lloyds of London for up to £15,000 worth of goods.
Whichever option you choose you must make sure you tell your insurer to guarantee your things remain protected.
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Comments
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I recently signed up for a deposit box at The Bank Safety Deposit Centre, in Great Barr, who offer £10k worth of free insurance on their boxes. The staff explained why it was important I took my own insurance policy out on the box (if the worst was to happen I get paid directly, not having to deal with third parties and waiting for legal proceedings etc) and even recommended a company although I did use another company instead. I feel safe to leave my home knowing that my items are in a secure place. I didn't have a lot of items to store just some documents, gold and other gems that I've collected and have been handed down to me but I'd hate to lose any of them! Definitely worth the investment if not just for peace of mind..
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I had assumed a safe deposit box at a bank would include some sort of cover or protection for its contents. If not (as the article seems to state), what is the point in paying for a box a long way from your home in which to store items that have no more protection than in your home? Are they just for storing irreplaceable items/those of sentimental value under, the assumption that your house is more likely to be burgled than a bank? For replaceable items I'd rather have them handy, given that I've got to get contents insurance cover for them either way.
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Another alternative: buy a safe. Small safes cost from a few hundred to a few thousand pounds - so comparable to a similarly sized deposit box held for several years. They have insurance ratings - what value of cash and/or valuables you can put in, and still have them considered "safe" for insurance purposes. The best ones attach securely to the fabric of your house, but you then have to spend again when you move. (If you move into a house that already has a safe, or buy a secondhand safe, you MUST get a locksmith to see to the lock so that any keys that other people may have will no longer fit.) For important documents, a fireproof safe is worth considering.
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10 August 2015