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Home >> Keeping Your Money Safe
Is a Safe Deposit Box Safer than an Account if the Bank Fails?
If I close my deposit accounts, can I store my money in a safe deposit box? Is this action restricted by my lease agreement and are there any state or federal laws that would make this action illegal? |
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 Yes, you can store cash in your safe deposit box and No there are no state or federal laws that make this action illegal. If you seriously analyze this question, how many current box renters now have coin collections, silver dollars, two-dollar bills, gold coins and many other type of currency stored in their boxes? These box renters are not breaking any state or federal laws because there are no laws to break. Even if there were such a law, financial institutions could not enforce it because they have no knowledge of what renters store in these boxes.
Some lease agreements do restrict the storage of cash in a box, but others don't. When answering consumer questions, financial institutions should review their safe deposit contract with the box renter. The renter should be very familiar with the language in this agreement. In some contracts, it may state that cash should never be stored in a box, but in many others, there is usually a clause that indemnifies the institution if cash is stored in the box and it is lost or destroyed.
The only regulation that approaches this situation comes from our friends at the Internal Revenue Service. The IRS has a federal regulation that states; "Consumer will not conceal cash from the United States government to avoid paying income tax on it." Historically many safe deposit managers have interpreted this federal regulation to mean that consumers cannot store cash in their box. This is not what the regulation says.
Published on BankingQuestions.com 10/17/08
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