Storing gold in a bank safety deposit box is a popular way to store gold.
For your smaller amounts of gold we think a safe deposit box is far safer than storing your gold at home.
Let’s look at some of the pros and cons …
Secure, 24/7 protection in a bank.
Approved by IRS for Gold IRA storage.
Gold can be held with other valuables in same box.
Cannot store a large bulk of precious metals in one safety deposit box.
Your gold is not insurable or insurance options are expensive.
To add or remove gold from deposit box requires a visit to bank.
Gold requires assay if need to sell (bullion vaults assay gold before storing).
Storage fees are payable.
So, if you’re thinking about renting a safe deposit box for your gold, here are some things to consider …
Tips for Choosing a Safety Deposit Box
Consider these tips before choosing your safety deposit box.
- If you are storing gold as part of your self-directed Gold IRA and you have chosen a safety deposit box for storage, the company holding the deposit box must meet IRS standards.
- Safe deposit boxes come in different sizes – ensure the size of the box is big enough to hold all your valuables.
- Book your safe deposit box before ordering any gold for delivery. Do not assume your local bank has a safety deposit box available for rental. They are popular forms of safe storage.
- Your IRA custodian will have access and ownership of the gold in your self-directed gold IRA. Ensure they have access to the safe deposit box.
- Confirm the insurance coverage for your gold. You may be able to extend your home contents insurance to cover any personal gold (but not for your gold IRA, that is a separate entity).
- Unless there is 24/7 access to the safety deposit boxes, do not leave gold in the box that you might need in an emergency.
What Does the FDIC Have to Say?
The Federal Deposit Insurance Corporation (FDIC) is the federal organisation that insures bank accounts in the USA.
Bank accounts are currently insured up to a value of $250,000. If you place cash in a safe deposit box, instead of a bank account, it is not covered by FDIC insurance.
Here is what the FDIC have to say about safety deposit boxes.
“1. Think about what should or should not be kept in a bank’s safe deposit box. Good candidates include originals of key documents, such as birth certificates, property deeds, car titles, and U.S. Savings Bonds that haven’t been converted into electronic securities. Other possibilities include family keepsakes, valuable collections, pictures or videos of your home’s contents for insurance purposes, and negatives for irreplaceable photos. (Another option may be to store digital images of important documents and photos on a secure Web site that you can access from anywhere over the Internet.)
You probably wouldn’t want to use your bank safe deposit box to store anything you might need to access quickly, perhaps on a night, weekend or holiday. That could include passports and originals of your “powers of attorney” that authorize others to transact business or make decisions about medical care on your behalf. For guidance on where to store your original will, check with an attorney about what is required or recommended based on state law.
2. You’re better off stashing your cash in a bank deposit account, like a savings account or certificate of deposit, than in a home safe or a safe deposit box.“Unlike money in a savings account, money in a home safe or safe deposit box cannot earn interest, so the purchasing power of your cash will decrease,” said Luke W. Reynolds, Chief of the FDIC’s Community Outreach Section. “Plus, cash that’s not in a deposit account isn’t protected by FDIC insurance.” (See #5 for more about the potential risks.)
3. A home safe isn’t a true replacement for a bank’s safe deposit box. A home safe may be good for replaceable items you may need immediate access to – such as a passport – but home safes are not as secure as safe deposit boxes. “A burglar could more easily break into your home, force you to open the safe or haul off the entire safe and access the contents than get inside your safe deposit box,” said Reynolds.
4. If the bank fails, you’ll still have quick access to your safe deposit box. In general, the full contents of your box should be available the first business day after the bank closes.
5. No safe deposit box or home safe is completely protected from theft, fire, flood or other loss or damage. Consider taking precautions, such as protecting against water damage by placing items in plastic containers or zip-lock bags. And, don’t keep identifying information on or near your safe deposit box key, such as the box number and the bank’s name, in case of loss or theft. Remember that, by law, FDIC insurance covers only deposit accounts. Also, don’t expect the bank to reimburse you for theft of or damage to the contents of your safe deposit box. If you want protection for the valuables in your safe deposit box or home safe, talk to your insurance agent.”
Visit these articles to find out more about safety deposit boxes:
- MarketWatch – How Safe is that Safe?
- Bank Account Guide – Safety Deposit Box
- Tip hero.com – 15 things you should know about safe deposit boxes