Customers forced to box clever as banks pull out of safekeeping
As banks call for safety-deposit boxes to be emptied, private operators are moving in
When you open a safety-deposit box, you will be invited to list a number of people who will be allowed to access the box. In the event of your death, if no person is named on your account, the box will form part of your estate
It’s the end of an era for banks as a vault for safekeeping key items belonging to customers, including legal documents such as property deeds. No longer seen as a value- added service they can offer customers for free, banks increasingly see safekeeping as an expense and an effort that is no longer justified.
Bank of Ireland, for example, says the service was causing an “unacceptable health, safety and security risk in some branches”.
Ulster Bank has become the latest bank to exit the market, and while it signalled its departure some time ago, it is now calling on customers to empty their boxes. The bank is currently writing to its 7,000 clients giving them 60 days’ notice to come and collect their belongings.
But if you are one of these customers, or if you have valuable documents or items you wish to move out of your home, what are your safekeeping options?
The banks’ approachUlster Bank is not the only bank to stop providing a safekeeping service. Both AIB and Permanent TSB are also in the process of closing their vaults, while Bank of Ireland started a “phased removal” of safekeeping facilities in May 2014.
It stopped accepting items in 2010, and customers who visit to inspect an item now are given a 30-day notice period after which they must remove it or it will be “archived”.
Once archived, a customer will be able to access the item only to remove it.
While it’s currently just engaging with customers visiting the branch, the bank intends to step this up at a future date by identifying the owners of items stored with it, “many of which have not been viewed in many years”.
Indeed, from a historical perspective the vaults may be offer a wealth of stories – a spokeswoman for Ulster Bank for example, said some of the items it stores on behalf of its clients are more than 100 years old. However, the banks have no way of assessing what these items might be, as they are not legally entitled to access items stored in safety-deposit boxes.
What about a safety
-deposit box?With the departure of the banks from the market, a number of private operators have moved into the space. Dublin operators include Sentinel and Merrion Vaults, while Cork Vaults offers a similar service in the Munster area.
These new operations offer safety-deposit boxes akin to what you might see on television, with row upon row of boxes storing everything from jewellery to computer data drives to documents. Each box can be opened only with two keys, with the owner of the box given one and the vault operator holding on to the other.
Séamus Fahy, a co-founder of Merrion Vaults, was struck by the difficulty in finding a safety-deposit service when he set up his diamond business, Voltaire Diamonds, some six years ago. So he set about offering the service himself.
The search for a suitable facility took three to four years, but Merrion Vaults was opened in 2013. Since then, business has been “very strong”, says Fahy.
“The main reason is burglaries and aggravated burglaries,” he says. “Our typical customer is an average couple in their 30s, 40s or 50s, who have some valuables at home, such as jewellery or title deeds, and they want to keep those out of the home”.
Fahy has also noticed a trend for people looking to store cash, given the banking uncertainty across Europe in recent years. While such cash deposits are not covered by the €100,000 government guarantee on deposits in the event that they were destroyed, insurance is typically available by the vault operator.
How much will a box cost?Broadly speaking, the cost of a box will depend on what it is you need to store. Merrion Vaults for example, which imposes a 12-month minimum rental, charges €199 a year for a box measuring 5cm by 13cm by 61cm, perfect for a small item of jewellery or USB key. A box big enough to store mortgage deeds or similar documents – 13cm by 25.5cm by 61cm – costs €450 a year, while its largest box, measuring 56cm by 40.5cm by 61cm, cost €3,250 a year.
The facility also has a strongroom, which it says offers ideal storage for paintings, fine art, furniture or large valuables. It can be rented from €5,000 for three months, rising to €12,000 a year, although Fahy notes that demand for this service is currently low.
To secure a box, a €100 deposit must be paid up front. It will be returned to you at the end of the contract.
Sentinel Vaults is currently running a promotion for 2015 with a 5cm by 13cm by 61cm box, perfect for cash, jewellery, passports and USB keys available for €199 a year. An extra-large box, measuring 13cm by 25.5cm by 61cm, which may be suitable for books and artwork, costs €649 a year.
In Munster, you can avail of a box with Cork Vaults, with prices starting from €300 for a 5cm by 13cm by 61cm box, up to €1,150 a year for a 25.5cm by 25.5cm by 61cm box.
While a security box may not come cheap, the real cost to you may be lower. If the item is currently insured under your home insurance policy, you may already be paying several hundred euro extra to get the item included on the policy.
Do I need insurance as well?If you opt for a safety-deposit box for your valuables, you won’t need cover on your home insurance policy for those items.
But you can get additional insurance cover for storing the item in a vault, in the event of a disaster destroying it. The safety-deposit provider will typically offer a certain level of insurance cover in the event something was to happen the items – €10,000 in the case of Merrion Vaults, for example – but it is also possible to take out additional cover. According to Fahy, cover of €150,000 will cost about €300 a year, although it is also possible to get a lower level of cover at a lower cost.
What happens if I die?When you open a box, you will be invited to list a number of people – with Merrion Vaults, for example, the maximum is three – who will be allowed to access the box. In the event of your death, if no person is named on your account, the box will form part of your estate. Once probate has been granted, the executor of your estate will be given access to the box.
It seems that while banks are currently having difficulties tracking down the owners of some of the goods and document they store, there are still lots of people out there who either believe, or are hopeful, that a relative who dies has left behind something in a safety-deposit box.
Fahy says: “We get a lot of inquiries from people asking: ‘Does my grandad have a safety-deposit box?’”
?Your box is your property and can be opened only by you. Typically, the only case in which a facility is obliged to open a box is when presented with a court order.
“We have a private viewing room, so we never know what’s in the box,” says Fahy.
Are there any cheaper options?Many of the items currently stored by the banks on behalf of their clients are likely to be mortgage deeds, with solicitors also holding on to these for their clients. However, if you are being asked to remove these deeds you may need to find another home for them but may be loath to pay the sums outlined above.
Holding on to mortgage deeds is a particular issue for older properties, where digital records may not exist. While deeds may be reconstituted in the event that the originals cannot be found, this may be a difficult and time-consuming process. Best then not to lose them in the first place.
If you’d rather a third party secures the deeds for you, you could consider opting for a document storage specialist such as Kefron. Based in Dublin’s Park West, it charges €95 to keep mortgage deeds for five years, or €150 for 10.
Another option to secure your precious items is a home safe. You can buy a fireproof safe from €270 in your nearest outlet of Woodies, for example, with the price increasing from there depending on the level of security it offers.