Safe Deposit Boxes
Is my gold secure in a bank’s safety deposit box?
People who don’t want to store their precious metals at home will often consider hiring out a safety deposit box at a bank.
Safety deposit box services, historically, have been heavily dominated by the banks – but as the need for this type of service has escalated and waiting lists at banks only grow longer, privately owned facilities are now becoming more and more prevalent.
But how safe is your gold and other valuables in this kind of environment? Before taking the plunge and placing all your assets in a financial institution’s safety deposit boxes, consider the possible drawbacks of such services.
For example, while many people assume their assets are protected, there have been historical instances where governments have seized citizen property stored in banks.
In 2008, ABC reported that some US states aggressively took control of ‘unclaimed property’ in banks’ safety deposit boxes. Valuables were sold off at a fraction of the price, while important documents were destroyed.
However, in some cases, banks made no contact with the deposit box owners before drilling, removing and selling the contents to the government.
California was identified as being particularly aggressive in seizing assets. The state altered legislation to reduce the number of years it took before a safety deposit box could be considered unclaimed.
Previously, there needed to be no contact between the customer and the bank for 15 years. This was dropped to seven years, then five, then three.
This is not just a problem in the US. Earlier this month, it was revealed the Australian federal government seized $360 million from household bank accounts that were dormant for just three years.
Figures from the Australian Security and Investments Commission showed the money was collected from 80,000 accounts in the year to May under new Labor rules.
“We have grandparents who put money aside for their grandkids’ future and farmers who have set aside money for a rainy day, but it was transferred to the government,” said Australian Bankers’ Association chief executive Steven Munchenberg.
Talking to Fairfax Media, he explained that it was a rushed piece of legislation primarily to boost the budget. While 90 per cent of the accounts contained less than $5,000, some were worth millions of dollars.
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