No laws exist that prevent you from keeping cash in a safe deposit box. However, while not illegal, bankers typically discourage customers from keeping cash in safe deposit boxes because funds inside the box are not insured. Additionally, you can only access your box during regular bank hours, which means you have no access to your cash during weekends and evenings when banks are closed.
Anti-money laundering laws enable the federal government to take punitive action, including fines, against people and institutions who assist money launderers. Because of the fear of falling foul of these laws, some banks include a clause in the safe deposit box agreement that states that customers cannot deposit cash in their box. However, bank employees have no access to your box so even though banks may not want you to keep cash in your box, in reality, no one knows what you keep in there.
When you deposit cash into a bank account you are protected against loss if the bank goes bankrupt because the Federal Deposit Insurance Corporation, FDIC, insures bank deposits up to $250,000 per account holder. However, FDIC insurance does not extend to protecting the contents of safe deposit boxes. If any harm comes to the contents of your box, your bank only is liable for losses caused by negligence and typically does not cover cash losses. You can increase your homeowners insurance to cover the contents of your box, but insurers do not usually protect cash.
Some people who are attempting to avoid paying taxes or are involved in criminal enterprises stow cash in their safe deposit boxes to avoid detection. However, the state and federal authorities can go to court and obtain a warrant that allows the police or other government agencies to access your box. If, for some reason, you cannot get to the bank to access your box you cannot simply give your key to someone else as banks only allow box owners to access safe deposit boxes. Therefore, do not keep important items in the box that you may need during an emergency.
You have to pay an annual rental fee when you have a safe deposit box and if you do not pay your rent within a certain period of time, your bank can hire a contractor to force the box open and remove its contents. Additionally, if you fail to pay your rent for a number of years, state laws require your bank to hand over the contents of the box to the state's abandoned property fund. You can file a claim with the state to get your money back, but that could take several weeks so do not keep cash in your box if you think you might need easy access to the money at some point in the future.
- "Bankrate.com"; Anything Goes in a Safe Deposit Box; Laura Bruce; August 2003
- Federal Deposit Insurance Corporation: Insured or Not Insured
- Comptroller of the Currency Administrator of National Banks: Answers About Safe Deposit Boxes
- Federal Deposit Insurance Corporation. “Five Things to Know About Safe Deposit Boxes, Home Safes and Your Valuables.” Accessed May 8, 2020.
- ESL Federal Credit Union. "Safe Deposit Boxes: Fees." Accessed May 8, 2020.
- Wells Fargo. “Order Checks, Stop Payments, and Other Requests Questions.” Accessed May 8, 2020.
- National Personnel Records Center. "DD Form 214, Discharge Papers and Separation Documents." Accessed May 8, 2020.
- TreasuryDirect. "Series EE Savings Bonds." Accessed May 8, 2020.
- Federal Deposit Insurance Corporation. “A Guide to What Is and Is Not Protected by FDIC Insurance.” Accessed May 8, 2020.
- Arkansas Law Review. “The Legal History of Safekeeping and Safe Deposit Activities in the United States,” Page 728. Accessed May 8, 2020.
- New York Times. "What You Need to Know About Safe Deposit Boxes." Accessed May 8, 2020.