WSJ Your Money Briefing - Why It’s Getting Harder to Find a Safe-Deposit Box

Episode Date: November 15, 2024

Bank customers are now struggling to find a spot to put their valuables since fewer banks are offering safe-deposit boxes. Wall Street Journal deputy personal finance bureau chief Ben Eisen joins host J.R. Whalen to discuss the disappearing service and where you can store your belongings.  Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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and now on to the show here's your money briefing for Friday, November 15th. I'm J.R. Whalen for The Wall Street Journal. For years, banks have allowed customers to rent safe deposit boxes to store important documents and valuables and protect them from fire and theft. Now it's becoming harder to secure a box. You have banks when they open new branches these days, they aren't necessarily putting safe deposit boxes in them. Some banks are telling customers they can't open new boxes,

and some are just saying altogether that they're shutting down these deposit boxes. And then the other sort of broader theme that we're seeing here is that banks have been shutting branches for years now, and when they shut branches, they shut safe deposit boxes. So if not at the bank, where can you go to safely store your belongings? We'll talk to WSJ's Ben Eisen after the break. The Goldman Sachs Podcast featuring exchanges on rates, inflation, and U.S. recession risk. Exchanges on the market impact of AI. For the sharpest analysis on forces driving the markets and the economy, count on exchanges between the leading

minds at Goldman Sachs. New episodes every week. Listen now. It's getting harder to find a bank that offers safe deposit boxes. Wall Street Journal Deputy Personal Finance Bureau Chief Ben Eisen joins me. Ben, these boxes have been offered for decades. In a lot of cases, they're inside of vaults.

When did banks begin phasing them out? Safe deposit boxes are something people generally think about when they think of what a bank looks like. They are the little boxes. they're inside of vaults. But no longer. Banks have been stepping out of this business for a number of years now. Some of them were doing this a decade ago, some of them haven't done it in the last few years or even the last year. Safe deposit boxes seem like they're as common a service as walking into a bank and applying for a loan. So you have banks when they open new branches these days, they aren't necessarily putting

safe deposit boxes in them. Some banks are telling customers they can't open new boxes and some are just saying altogether that they're shutting down these deposit boxes. And then the other sort of broader theme that we're seeing here is that banks have been shutting branches for years now and when they shut branches, they shut safe deposit boxes, and customers have to take their belongings out and put them elsewhere. When banks do open new branches, are they carving out space for deposit boxes? Banks will still have vaults for storing cash and other banking services, but they're not

necessarily putting safe deposit boxes in them all the time. Instead, what they're doing is they're creating more physical space for meetings and face-to-face interactions because what they say is customers, they do a lot of their banking online, they use apps, they use websites. When they want to come into the branch, they want to meet with somebody, they want to talk about applying for a loan, they want to talk about their investments, and that the nature of what people do in a branch has really changed. Is there a real need for safe deposit boxes?

It depends. The things that people used to put in them, people still have, whether it's family heirlooms that you want to store, like jewelry or a coin collection, or whether it's an important document that you don't want to keep in your house, like a title to a home. It generally tends to be a middle-aged or older crowd that has a safe deposit box, but those people exist. What else besides valuables and documents

do people put in the boxes? A lot of the usual stuff ends up in there, but then there's also all sorts of unusual stuff too that people told me about, whether it is baby teeth, false teeth, umbilical cords, once someone found two deer legs wrapped in parchment paper. But to be serious for a moment, banks don't actually hold these items. These are your items and they are held like you might in a storage locker. So people do put all sorts of stuff in there and when banks do have to drill into them for

whatever reason, they find these kinds of funny or unusual items. What does it usually cost to rent one? Traditionally, they've been pretty cheap. What we were told was they can be as little as $15 a year for a little box or they could be more than $250 a year for a big one and they are not like a big profit center for the bank. You might think of them as something that's offered to people that might lure them into the bank

and make the relationship between the bank and the customer stickier. So they might open up other accounts there and use other banking services as well. But this isn't the most profitable of the services provided. But a lot of people see them as useful. How are consumers reacting to this? We spoke to one customer who over the last year and a half

after losing her deposit boxes has called 13 branches and stopped by six or seven more looking for safe deposit boxes unsuccessfully. So you have people who are really scrambling to find them when they lose theirs. This customer is a gemologist, and she uses the boxes to store gems and jewelry. And the fact that she hasn't been able to find one has been a real impediment for her

because she has no permanent place to store some of this stuff. You spoke to some banks that have been eliminating safe deposit boxes. What did they tell you? One of the banks I spoke with was JPMorgan Chase. That's the nation's largest bank. And they told customers a few years ago that they could not open new safe deposit boxes. They could keep their old ones, but if the branch where those deposit boxes were closed, they would have to clear out the deposit boxes.

They also bought First Republic Bank last year. That was a bank that failed. When they turned over those branches and turned them into chase branches, those customers had to clear out their safe deposit boxes as well. There are a bunch of banks on different parts of the spectrum with this. So Santander was a bank that told customers early last year that they were just not offering safe deposit boxes anymore. They said they were underutilized.

PNC Bank, for example, isn't taking any action with its safe deposit boxes, but it's opening a hundred new branches and none of them are going to have safe deposit boxes in them. What options do consumers have who want to keep their belongings and documents in a safe place? Safe deposit boxes do still exist. There's millions of them if you can find one. Another thing that's popped up is some private businesses have gotten into this space. Private vaults is what they're called and you can go to one and rent a box.

It'll typically be a little bit more than a bank because this is the service that they are providing. This is an area of opportunity that people have spotted in this space. That's WSJ reporter Ben Eisen. And that's it for your money briefing. Tomorrow we'll have our weekly markets wrap up, what's news in markets.

And then we'll be back on Monday. This episode was produced by Ariana Asparu. I'm your host, J.R. Whelan. Jessica Fenton and Michael LaValle wrote our theme music. Our supervising producer is Melanie Roy. Aisha Al-Muslim is our development producer. Scott Salloway and Chris Zinsley are our deputy editors. And Falana Patterson is The Wall Street Journal's head of news audio. Thanks for listening.