The traditional safe deposit box tucked away in a secured vault might go the way of landlines or vinyl records as more consumers shift to digital banking.

The number of deposit boxes in the U.S. has dropped significantly, in tandem with a decades-long decline in bank branches exacerbated by the pandemic.¹ Many large banks are scaling back or even eliminating the service, citing high maintenance costs and reduced demand.²

Some banks no longer allow customers to rent new safe deposit boxes, while others have stopped offering boxes altogether.³ By one estimate there are 20% fewer boxes than the estimated 40 million boxes that existed six years ago.⁴

Going digital 

The increased use of cloud storage and digital recordkeeping has made it easier to store electronic copies of important documents like wills, birth certificates, and insurance policies.⁵

Digital recordkeeping of important documents is more prevalent among younger customers who do most of their banking online or on mobile phone apps. They view deposit boxes much like bank branches: largely unnecessary.⁶ 

The typical safe deposit box renter is at least 50 years old and has an income 14% higher than the average American.⁷

Many banks are deciding that security boxes aren’t profitable enough as more services shift online.⁸ Vaults and security boxes are expensive to build and require maintenance, security systems, staff training, and other expenses.⁹   

Always a need 

But deposit boxes aren’t expected to disappear completely. Larger boxes are typically no more than a few hundred dollars a year while smaller boxes cost considerably less at banks that offer the service.¹⁰

Empower research shows that 52% of Americans still think that “cash is king” despite the rise in digital banking and contactless payments. Nearly half of Americans (49%) feel safer holding cash versus other investments during times of economic uncertainty.

Finance professionals don’t recommend storing cash in deposit boxes because the money doesn’t earn interest. Boxes are generally viewed as more secure options than home safes for storing valuables such as jewelry, coins, and collectables. Deposit box renters can store items in a secured room with a heavy vault door, closed-circuit surveillance, and sophisticated alarm systems.1¹

Private vault companies have started opening locations as some banks drop the service.¹² There’s been strong demand for facilities that can store precious metals, such as gold and silver bars.¹³

Read more: All that glitters: How to invest in gold

Always a risk 

No storage system is 100% safe. Every year, hundreds of bank customers report that valuable items like cash and artwork have gone missing from their security boxes. Sometimes the fault lies with the customer ─ or ex-spouses, spouses, and other relatives that have access.¹⁴

Banks routinely face lawsuits for allegedly losing cash, jewels, and other deposit box items due to recordkeeping errors and other miscues.¹⁵ In some cases, bank employees have stolen valuables from boxes.¹⁶   

Vaults aren’t immune to natural disasters and other calamities. Hurricane Harvey’s storm surge destroyed hundreds of boxes at a Texas bank in 2017, while an earlier flood at a Missouri bank destroyed a rare 18th century violin stored in a vault box.¹⁷

The Sept. 11 terrorist attacks destroyed hundreds of bank vault boxes in New York, including one that held 40,000 photo negatives of John F. Kennedy.¹⁸ 

No federal protections 

Customers are usually on the hook for losses unless they have private insurance or can prove that the bank was at fault.

Many customers are shocked to learn that deposit boxes and their contents aren’t insured by the Federal Deposit Insurance Corporation (FDIC).¹⁹ Banks follow a patchwork of state laws for circumstances such as when a customer doesn’t pay for storage, can’t be reached, or dies.²⁰

Thousands of abandoned or unclaimed safe deposit boxes are turned over to state treasuries each year.²¹ Although state requirements vary, boxes are often regarded as unclaimed if a bank can’t contact the rightful owner for at least a few consecutive years.²²

State auctions 

Florida holds unclaimed items for just two years before auctioning them off.²³ Other states like Maine and Iowa can hold items for several years before limited storage capacity forces an auction.^24,25 Other states authorize the banks themselves to sell off deposit box contents.²⁶ 

The typical unclaimed or abandoned box has an average worth of a couple hundred dollars.²⁷ But some auctions have yielded much more valuable finds.

A 2020 auction by Bank of America included an unmounted star ruby for nearly $7,000 and a gold pocket watch for more than $11,000.²⁸ Iowa recently auctioned deposit-box contents that included a rookie Michael Jordan basketball card valued at about $5,000.²⁹

Read more: Is jewelry a good investment?

The former owners won’t see those items again, but there’s always a chance for fair compensation. Proceeds from state security box auctions are held in perpetuity for the rightful owners or heirs to claim.³⁰