As financial institutions clamour for ever more innovative technology, some are neglecting the old school classics. One such example is safety deposit boxes. Currently, they are, figuratively speaking, flying off the shelves. Whenever a bank opens a new facility for safety deposit boxes, they immediately sell out. Patrick Brusnahan looks into their popularity
Safety deposit boxes are not on the top of many banks’ agendas at the moment. As far back as 2013, they were already losing their charm. Barclays ordered its customers to clear out their safety deposit boxes by Christmas of that year and now only offers document storage.
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HSBC, Lloyds Bank and TSB have also dropped the services for new customers, but certain existing users are allowed to keep their boxes.
NatWest previously had only one branch in Manchester with safety deposit boxes, but this had an extremely long waiting list. More recently, in April 2016, it launched an automated safety deposit service in one of its branches.
Two UK banks still offering safety deposit boxes are Metro Bank and State Bank of India, but these can come to a cost of up to £600 a year.
There is one common link between all safety deposit boxes offered by any bank; they are always in demand. Why?
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By GlobalDataSanjiv Chadha, regional head, State Bank of India UK
Our safety deposit boxes are available to SBI customers with a current, savings or any fixed deposit account. Some SBI customers have held deposit boxes with the bank for more than 20 years. It’s a service valued by our customers and we are seeing an increasing number of enquiries for these services which are no longer widely available on the high street. Our customers are looking for a place they can trust their valuables with, whether that’s legal documents or objects of importance to them.
Iain Kirkpatrick, Managing Director of Retail, Metro Bank
At Metro Bank we are proud to be unique in offering over 70,000 safety deposit boxes across all 41 stores, with customers able to access their box seven days a week, 362 days a year, early to late. Over the past few years we’ve seen a significant increase in demand for safety deposit boxes, with boxes being reserved well in advance of new stores opening.
Numerous banks however are continuing to phase out offering these facilities for their customers’ valuables, with most major high street banks closing the service to new customers and others ending this vital facility altogether.
Providing our customers with peace of mind – that their valuables are being stored safely and securely, as well as having access at a time convenient to them, and as many times as they wish, is really important to our customers – and that means it’s really important to us too.
Ross Norman, CEO, Sharps Pixley
We live in a world where there is a deficit in trust and as such, clients like to hold assets in a secure location and often outside the banking system. In short, with financial assets such as gold performing as strongly as they are, investors see a safe haven as not just what you buy, but also where you keep it. In that environment a private safety deposit box is ideal. The cost at £250 per annum is relatively inexpensive in that you could hold up to half a million pounds of bullion in an average box.
Of course should the UK move to negative interest rates that would not just obviate the need for depositing money at a bank, but a safety deposit box would then become quite compelling in that it could be both cheaper and safer.
