Who needs a safe-deposit box?

Kiplinger's Personal Finance Magazine, Nov, 1998 by Stephanie Gallagher

Maybe not you. A home safe is more convenient--and cheaper, too.

Digital-age bank customers don't spend much time in bank lobbies anymore. So why cool your heels waiting for admission to the bank's vault, where you've stashed your valuables in a 3- by 5- by 18-inch metal box? Although a safe-deposit box is a safe place to keep birth certificates, deeds, insurance policies, rare coins and other hard-to-replace possessions, a good home sate can be cheaper and more convenient--and no less secure.

A bank vault may withstand fires, explosions, burglaries and floods, but none is "fireproof, bombproof, waterproof or burglarproof," admits Joyce McLin, executive director of the American Safe Deposit Association. During the 1993 Midwest floods, for example, water seeped into the vault of one Missouri bank and damaged the contents of some safe-deposit boxes. (Keep your documents in sealed plastic bags, McLin advises.)

Such events are rare. But when they do happen, federal deposit insurance won't bail you out, and the bank may not, either--even if it carries liability insurance against its own negligence. "If the bank has alarm equipment in place and has met all the building codes," it would be hard to prove it was negligent, McLin says. So on top of the $30 to $75 a year you pay for your safe-deposit box, you should probably add a rider to your homeowners policy--at $8 to $15 a year--to cover the contents.

A CONVENIENT ALTERNATIVE. For the price of a safe-deposit box plus insurance for four or five years, you could buy a decent home safe that will last a lifetime--and that you can access outside of bankers' hours. Because your valuables are stored right in your home, you could keep more frequently used papers, such as airline tickets and brokerage statements, in it. You could also quickly lock up loose valuables when repair people, cleaning people or babysitters come into your home. And should the contents be damaged or stolen despite your precautions, they'd be covered under your ordinary homeowners policy.

Expect to spend $150 or so at a hardware or home-supply store for a standard 1-cubic-toot home safe, which holds a lot more than a safe-deposit box. The box should be rated by Underwriters Laboratories for fire protection--a one-hour rating means that the safe can withstand 1,300-degree Fahrenheit heat for an hour. Home safes in that price range are not watertight, so heed the plastic-bag advice at home, too.

Burglary is the one peril that will keep some worried folks from parting with their sale-deposit boxes. A typical 1-cubic-foot sate weighs less than 100 pounds and has a combination lock that a sophisticated burglar could conquer. If you have a security-alarm system, you probably have enough theft protection. If you don't, you may want to spend more for a bigger, heavier safe that would be even harder for a thief to carry away: A 160-pound, 2-cubic-foot safe costs about $300 and may have a dual combination-and-key lock that's harder to defeat. Or you could bolt a standard safe to a wall or floor. The priciest safes (at up to $1,500) come with ultrasophisticated electronic locks and are often water-sealed.

WHAT TO KEEP IN YOUR BOX. Stocks, bonds, deeds, mortgages, car titles, insurance policies, rare coins and valuable jewelry are among the obvious candidates, whether you buy a home safe or continue to rent a safe-deposit box. But both are also good places to keep:

* Negatives or copies of important family photographs.

* A videotaped inventory of the contents of your home, which could help when settling an insurance claim.

* Backups of important computer disks, such as where you've stored your half-finished novel or doctoral dissertation.

What about your will? Popular wisdom cautions against keeping your will in a safe-deposit box because your heirs may not be able to find it in time to honor your burial directions and any other wishes. McLin says that's seldom a problem because most states allow an immediate "will search" to remove burial information and insurance policies; in states that don't, survivors can easily get a court order to search the box. Or you can rent a safe-deposit box jointly with a spouse or trusted relative so that the survivor can have access to the contents. But it would be even easier to keep your will in a home safe and make sure a loved one knows how to open it.

RELATED ARTICLE: MANAGING MONEY

TREASURY BOND prices keep rising and yields falling as investors seek the safety of U.S. bonds. But money market fund yields, based on short-term bonds, hold firm. Strong Investors, the top performer, sank only 0.02 percentage point from last month, and the average fund's yield hasn't budged.

Top-Yielding Money-Market Mutual Funds

                                       RECENT               MIN.
Taxable                             3D-DAY YIELD           INVEST.

1. Strong Investors(*)                  5.66%              $1,000
2. Kiewit(*)                            5.42               10,000
2. Lake Forest(*)                       5.42                2,500
4. Aon(*)                               5.39               10,000
5. Transamerica Premier(*)              5.38                1,000
   NATL AVERAGE                         5.01%

Taxable                        WEB ADDRESS (WWW.)

1. Strong Investors(*)         strongfunds.com
2. Kiewit(*)                   kiewitinvestment.com
2. Lake Forest(*)              lakeforestfunds.com
4. Aon(*)                                --
5. Transamerica Premier(*)     funds.transamerica.com
   NATL AVERAGE

                                     TOLL-FREE
Taxable                                NUMBER

1. Strong Investors(*)              800-368-3863
2. Kiewit(*)                        800-254-3948
2. Lake Forest(*)                   888-295-5707
4. Aon(*)                           800-266-3637
5. Transamerica Premier(*)          800-892-7587
   NATL AVERAGE

                                           TAX. EQ. YIELD
                           RECENT              28%/31%
Tax-free                3D-DAY YIELD           BRACKET

1. Strong                  3.28%              4.6%/4.8%
2. ABN AMRO(*)              3.27               4.5/4.7
3. USAA                     3.19               4.4/4.6
4. Benham(*)                3.18               4.4/4.6
5. Zurich                   3.18               4.4/4.6
   NATL AVERAGE             2.73%              3.8%/4.0%

                            MIN.
Tax-free                  INVEST.        WEB ADDRESS (WWW.)

1. Strong                 $2,500          strong-funds.com
2. ABN AMRO(*)             2,000         abnamrofunds-usa.com
3. USAA                    3,000                 --
4. Benham(*)               2,500         americancentury.com
5. Zurich                  1,000          zurichfunds.com
   NATL AVERAGE

                         TOLL-FREE
Tax-free                   NUMBER

1. Strong               800-368-3863
2. ABN AMRO(*)          800-443-4725
3. USAA                 800-382-8722
4. Benham(*)            800-345-8722
5. Zurich               888-523-4140
   NATL AVERAGE