Is it Legal to Put Cash in a Safety Deposit Box?

A safety deposit box leased through a local bank provides you with a place to store important items away from home. As long as your bank's terms and conditions for safety deposit box leases don't prohibit storing cash, you don't have to worry about a law that would prevent you from doing so. But while putting your cash away in the box may keep it safer than leaving it at home, you have several considerations to know about to decide whether to go through with this option. You may find that other ways to store your cash securely can offer more peace of mind alongside financial benefits.

Coming in different sizes to fit your belongings, safety deposit boxes act as locked safes at the bank where you have access during regular business hours. The typical safe deposit box cost can vary based on factors like the size, bank and your status as a customer, but can run up to $200 annually. Banks usually have you sign a lease agreement for a year, and you may have to schedule an appointment to sign up.

Once you get your box, you'll have to hang on to the keys since the bank often can't replace them if you lose them. In that case, you'd need to seek a locksmith's help to get access to your cash.

Before storing anything in a new safety deposit box, check your bank's rules and regulations guide, which you can often find online or ask the bank for a copy. While banks don't often restrict you from putting cash in the box, you should look through the guide's section on prohibited uses to make sure.

Often, banks ban things like weapons, chemicals, drugs and anything else that could present a danger, while items like cash, jewelry and documents would be permitted. Storing prohibited items can lead to the bank seizing your box and destroying contents along with legal issues for illegal items.

Although you can likely store cash in your safety deposit box without a problem, you do have to consider these risks and drawbacks of doing so:

• Lack of interest earned: When you have your cash stored in a safety deposit box, you miss out financially since you get no return on your money, no matter how much you have saved. With an alternative like a savings account or certificate of deposit, you could at least earn some interest and see your money slowly grow.

• Risk of loss or damage: When you read your safety deposit box agreement, you'll probably find a limitation of liability section that says the bank won't be held responsible if something happens to the contents in your safety deposit box. So, if the bank burns down or gets flooded, you often won't get to make the bank compensate you, and you'd need to rely on any third-party insurance.
  

• Potential of unauthorized access: Banks don't hold responsibility if someone gets access to your safety deposit box keys and takes the contents. So, if you lose a key or share one with someone who proves to be dishonest, you could lose your cash.
  

• Limited access to cash: If you have an emergency and need cash right away, having it in the box can cause problems if the bank is closed or if you can't physically visit.
  

• Possibility of seizure: Failing to pay your fees or breaking the rules could mean having your box and contents seized. Legal processes like wage garnishment could also cause the bank to access your contents, so don't think you can successfully hide your cash from the government or a collector with a safety deposit box.
  

As an alternative to using a safety deposit box, you could purchase a fireproof safe to store the cash in your home. Although you'd still have risks and miss out on interest earned, this would be a safer option than storing the money under a mattress or in a regular box.

On the other hand, you could move the money to a bank account of some type where you'd earn interest and have protection from the Federal Deposit Insurance Corporation if a disaster happened. If you're comfortable with some more risk, you could put your cash in a brokerage account and potentially earn a higher return with stocks and bonds.