Historically the origin of banking is connected with storage of valuables.
Other bank services (bank account, deposits, loans) appeared much later and resulted from the storage operations.
What is a safe-deposit box?
Safe-deposit box is a metal safe placed in a bank, in a special room with an armor-plated door (called vault) under increased security and video alarm system. Metal safes are of different size, equipped with special locks and have two keys. One of the keys is committed to the owner of the safe-deposit box, the other one is left in a bank. To open the safe-deposit box you should use both keys simultaneously.
Safe-deposit boxes are designed to store cash money, securities, documents, jewelry, precious metals, antiquities, works of art, electronic storage medium and other things. Exception is toxical, radioactive, explosive, narcotic, inflammable substances, weapons and items that create emit strong electric and geomagnetic fields.
Safe-deposit boxes: who uses it and why?
Traditionally the actuality of the valuables storage service highly rises in summer (during the holiday period), during Christmas holidays. Safe-deposit box can be the storage for your valuables in case you have a long-term business trip or long term departure. A lot of people just keep their savings and valuables in bank, considering that to keep them at home is insecure.
Moreover safe-deposit boxes are commonly used as a guarantee in civil transactions. For example, the service is widely used to transfer money from the customer to the seller on the secondary housing market. Thus the customer sets up a safe-deposit box rental contract with a bank for а particular period of time and puts money in the safe-deposit box. After the trade registration the seller produces to the bank his or her passport, registered agreement of sale and purchase and other documents specified by the agreement of the parties and takes the money. If for some reasons the documents weren’t registered and the deal fell through the customer can take his money after producing the documents confirming that the bargain didn't come off.
Characteristics of for safe-deposit box agreement
Relations between bank and safe-deposit box user are juristically regulated by two kinds of agreements: rental contract and custodial contract. In case you set up a custodial contract your bank will make up inventory of all the subjects in your safe-deposit box and will be responsible for their safety. Bank officers will be present at the storing of valuables and control all the client operations with valuables from now forward.
How much does it cost?
Price of storage service as usual depends on following conditions:
1. Size of the safe-deposit box. The bigger the box is the more expensive it is.
2. Availability period. The longer the period of rent is, the cheaper one day of rent costs.
3. Whether you are a bank customer or not.
4. Purpose of valuables storage. Custodial contract service is usually more expensive than rental contract service.
Some banks ask to stand bail (security deposit), that will be paid back on a full scale after the expiration of the contract validity.
Why some private individuals and legal bodies prefer to store their monetary resources in safe-deposit boxes rather than depositing, investing in financial instrument?
Storage of valuables in individual safe-deposit boxes doesn’t return interest. Moreover the storage is an expense item! However this service has some advantages:
1. Bank has no property right in regard to the storing valuables. Bank is only an owner of the storaging equipment, but not the valuables themselves. Customer can withdraw his valuables in any time.
2. This service provides though not absolute, but maximum privacy among others bank services.