Safe deposit box options in the USA

Despite the obvious convenience of ready access, most investors soon come to realise that storing valuable assets at home is both risky and extremely costly. So for US investors that usually means renting some kind of safe deposit box facility. A range of secure commercial options are certainly available, but often come with particular advantages and disadvantages. Securing the best protection should thus include looking carefully at your personal priorities. Why? Because if, for example, maximum privacy and total discretion are very important to you, you may not be entirely happy with a solution where the primary focus is on ultra-convenient administration or automated access arrangements.

In the USA, various safe deposit facilities are available via banks, precious metal dealers and private providers, as well as some safe deposit alternatives you may also wish to consider. And to help you make an informed choice, this article now looks at these options in more detail:

A standard US bank safe deposit box

Traditionally, as elsewhere, US banks have been seen as the most trusted and secure means of ensuring the safekeeping of gold, silver and other valuable assets. However, the modern banking world appears to be adopting a far more nuanced and often paradoxical attitude towards what remains a basic customer requirement.

Because banks have generally supported and encouraged the rolling adoption of internet and ‘self-service’ banking, many of their former in-house customer services have been correspondingly streamlined, severely cut back, or in some cases removed entirely. So, while some US banks continue to offer safe deposit facilities, others have already dispensed with what they now regard as an expensive, non-core business activity. Thus today’s prospective safe-deposit seekers may find some banks refuse safekeeping requests, while others happily continue to accept their business.

One consequence of such mixed messages is often a reduction in the funding allocated to the upkeep and maintenance of secure bank vaults and strongrooms. What were once state-of-the-art security installations are now often struggling to even keep pace with the most modest of modern security standards.

Safe deposit customers requiring convenient access arrangements will find such access is invariably limited to banking business hours.

Perhaps of much greater concern, banks cannot provide safe-deposit holders with absolute protection, because unlike regular bank account deposits, federal regulations will neither insure nor protect the contents of safe deposit boxes. Thus, your valuable assets could always be at real risk from fire, flood or theft. Most banks will refuse to offer any insurance cover for safe deposit box contents, insisting this remains the personal responsibility of the customer. Those few institutions prepared to offer any compensation at all tend to set this at a very low level (typically $10,000) far below the likely true value of any stored items.

US banks will always insist they have no knowledge of the contents of any safe deposit box, and there is little doubt customers can rely upon their everyday discretion in this respect. However, US legislation such as the Bank Secrecy Act (1970) and the Anti-Money Laundering Act (2020), impose stringent obligations on financial institutions to verify customer identities, record financial transactions, and report any suspicious activity to the regulatory authorities. Furthermore, the US has yet to pass any federal law equivalent to the EU’s GDPR legislation, though around 20 states have already enacted their own data protection legislation. For customers seeking maximum confidentiality and discretion, that means the level of privacy banks afford their customers will much depend upon the applicable state legislation. Note also that you will need an ID and/or Social Security Number to set up a bank safe deposit facility – this alone presents the authorities with the means to discover your safe deposit box.

Conclusion: A bank safe deposit cannot guarantee anonymity.

A safe deposit box with a US precious metal dealer

A bank safe deposit box is not the only option for storing valuables and some precious metal dealers may also be able to offer in-house precious metal storage facilities for their customers. One appealing advantage of such an arrangement is that it creates a ‘one-stop shop’ for those with investment holdings. However, even with a precious metal dealer there are a number of other considerations to take into account:

1. Such paid storage arrangements may involve a customer commitment to ongoing sales volumes or similar long-term buying obligations.

2. Limited insurance cover is often available, but customers should always check the risk coverage and ensure the existing sum insured can be extended if required.

3. While precious metal purchases from the dealer will qualify for storage, many dealers will not allow the storage of other assets and valuables. In particular, customers will often not be permitted to include precious metal holdings purchased from other sources – which means separate holdings cannot be consolidated.

4. Access to your rented safe deposit box will be limited to the dealer’s business hours. Generally, you will receive all safe deposit box keys.

5. In some instances, a bullion dealership may offer customer storage while in reality using the services of a private third-party storage company to fulfil the storage contract. This can sometimes create complex legal liabilities and may also mean your gold or silver could be stored at a different location, which may also have access implications.

Dealers obviously engage in the buying and selling of precious metals, which means they are tightly regulated and subject to the same federal legislation as financial institutions. Thus recording transactions and a potential obligation to report some trading activities – e.g. cash transactions over $10,000 – present a real risk that your privacy will be compromised.

Conclusion: This option offers greater safe deposit box security than a bank, but cannot guarantee anonymity.

A safe deposit box with a US private storage company

While banks are increasingly reluctant to fund the upkeep of safe deposit facilities, private safe deposit companies are specialist storage providers. Thus, they invest in state-of-the-art security because their role is to provide customers with the best possible asset protection. Yet, superior security is not the only benefit this non-bank alternative can offer. Safe deposit rental clients are free to store precious metals, cash and any other valuable assets you may have – with the obvious exception of illegal substances and explosives. Furthermore, your assets may be fully covered by insurance, which may even be included in the rental price. Most storage providers will hand over all keys to the safe deposit box and allow 24/7 access 365 days a year.

Perhaps most important of all, non-bank storage providers are not subject to any financial reporting obligations. That means your privately stored assets do remain private, and totally anonymous.

Some points you should consider when selecting a private provider:

1. While military-grade security is often a given, consider the storage location too. Rather than an ostentatious city-centre ‘Fort Knox’ installation, look for a discreet out-of-town site which is suitably low-profile and has a versatile and adaptable selection of storage options.

2. Clarify all access protocols: out-of-hours procedures; key custody; scope for private viewing.

3. Confirm that an account sign-up is limited to know-your-customer protocols with personal data gathered for on-site administration only.

4. Verify the extent of insurance cover applicable, the opportunities to extend the sum insured if required, and whether there is any compulsory onward disclosure of personal information to an insurer.

Conclusion: This extensive option provides maximum discretion and premium protection for your assets and valuables.

Safe deposit box alternatives

Certain assets may require alternative storage arrangements. Larger precious metal holdings are a prime example because these are high-value items whose weight and volume will often exceed the physical storage space provided by a safe deposit box. To accommodate this, private, non-bank storage providers offer allocated storage sectors within their ultra-secure vault facilities. As such, access, privacy, security and allied concerns will be addressed in the same way as described earlier for safe deposits.

Owners of gold, silver and similar white-metal holdings will always retain full title to these assets. However, it is essential to ensure you receive an accurate inventory of your stored goods, which must always be kept up to date. Furthermore, you should verify the insurance cover provided is suitably comprehensive and check your deposited holdings will actually be kept under allocated storage conditions. This means they are separately stored and clearly identifiable. Above all, your assets should never be subject to ‘collective’ (unallocated) storage, because then you are only entitled to returned goods of equivalent value – so there is no guarantee these will be the actual precious metals you owned and delivered to the depository.

Conclusion: Allocated storage likewise offers maximum discretion and premium protection for your investment holdings and more.

US precious metal regulatory initiatives

A number of US authorities and regulatory agencies are tasked with maintaining tight control over the precious metal industry, both to protect bona fide investors from fraudulent activity and to discourage criminal networks. Regulatory monitoring and compliance is carried out by bodies such as: FinCEN (the Financial Crimes Enforcement Network), SEC (the Securities and Exchange Commission), CFTC (the Commodity Futures Trading Commission), and IPMI (the International Precious Metals Institute).

Bank safe deposits and inheritance

It is always wise to keep your heirs informed about your safe deposit box assets. Should a death occur with your heirs unaware of the existence of a safe deposit, your bank will soon take action. Once the payment of rental fees ceases, the bank will deem the box abandoned. It will then be opened and the contents passed to the state’s unclaimed property department. They in turn will auction saleable assets and the net proceeds will go to the public purse.

Bank-independent specialist providers evidently represent the optimal choice for safe deposit box storage. So, why not consider diversified protection of your portfolio assets by choosing valuable storage with Swiss Gold Safe, a bank- and dealer independent provider based in Switzerland? A trusted safe-haven for both commercial institutions and private investors, this popular, long-established company offers a broad range of safe deposit boxes and private vault facilities with segregated storage. In addition, this Swiss provider is located in a country which is regarded as a supreme model of economic and political stability.