Chase Safe Deposit Box Closures: What Customers Should Know

For generations, safe deposit boxes have been a routine part of the traditional banking relationship. Customers stored important documents, jewelry, family heirlooms and other valuables at the same bank where they kept their checking and savings accounts.

But that relationship is changing.

JPMorgan Chase has been closing safe deposit boxes at branches throughout the region, leaving many longtime customers searching for an alternative. At Refuge Vault in Del Mar, we've spoken with hundreds of impacted Chase customers over the past year.

We sat down with Sean, one of the partners at Refuge Vault, to discuss what he's hearing from customers, why banks are moving away from safe deposit boxes and what consumers should consider when choosing a replacement.

Customers Are Disappointed — But Many Understand the Decision

For customers who have relied on the same bank for secure storage for decades, receiving a notice that their safe deposit box is being closed can come as a surprise.

According to Sean, reactions from Chase customers have varied considerably.

"Some clients are angry, some are understanding, some are scared, some are nervous, and some feel like they saw the writing on the wall years ago."

Despite those different reactions, he says there is a common theme.

Many customers relied on their bank to provide secure storage for years and are disappointed to lose that service. At the same time, they recognize that banks are businesses and have to make decisions about which services make economic sense to continue offering.

Why Are Banks Moving Away From Safe Deposit Boxes?

The traditional bank branch has changed dramatically over the past two decades.

Customers increasingly deposit checks, transfer money, pay bills and manage their accounts digitally. As banking becomes more digital, banks are reconsidering how much physical space they need and which services justify maintaining that space.

That calculation can be particularly important in markets such as Southern California.

"Real estate and staffing are very expensive," Sean explains. "Banks have a hard time justifying utilizing space and employee head count to provide a service they view as more of a nuisance than a revenue driver."

Safe deposit boxes require something digital banking doesn't: physical infrastructure.

They require vault space, branch employees, security procedures and ongoing administration. Yet the annual revenue generated by a safe deposit box can be relatively small compared with other banking products and services.

That makes secure physical storage an increasingly awkward fit for the modern banking model.

Losing a Safe Deposit Box Can Be More Disruptive Than It Sounds

For someone who has rented a safe deposit box for 10, 20 or 30 years, replacing it isn't necessarily as simple as finding another box.

There is also an element of trust.

"If you relied on your bank for secure vault storage for decades, in some ways you probably began to take it for granted that they would always be there for you," Sean says. "You had peace of mind in the fact that your most important items were protected by the bank that you had learned to trust."

Finding a replacement that restores that same sense of security can therefore be just as important as finding a box with the right dimensions.

What Are People Keeping in Safe Deposit Boxes?

Despite the enormous shift toward digital records and cloud storage, there are many things that simply can't be digitized.

At Refuge Vault, we see customers storing a wide variety of important property, including:

• Original estate planning documents such as trusts and wills

• Property records and deeds

• Family heirlooms

• Jewelry and watches

• Collectibles

• Important personal documents

• Other valuables customers prefer to keep outside their homes

Some of those items have significant financial value. Others may have relatively little monetary value but enormous personal significance.

A family heirloom, for example, might be impossible to replace regardless of what an insurance policy pays.

That's one reason demand for secure physical storage hasn't disappeared even as banking itself has become increasingly digital.

Should You Simply Move Your Box to Another Bank?

For displaced customers, the most obvious solution may be to find another nearby bank that still offers safe deposit boxes.

That may work, but Sean believes customers should consider whether they could eventually find themselves in the same situation again.

"In a perfect world, clients would only have to go through this once," he says.

Chase isn't the only bank to reduce or eliminate safe deposit box services. While nobody can know which institutions might change their policies in the future, Sean believes the economics affecting Chase aren't unique to one bank.

Smaller community banks may be more likely to continue providing safe deposit boxes as part of a traditional relationship-based banking model. For the country's largest banks, however, physical storage isn't necessarily a core business.

That creates an important question for customers choosing a replacement:

Do you want your next safe deposit box to be an ancillary service offered by a bank, or do you want secure storage to be the provider's primary business?

Bank Safe Deposit Boxes vs. Private Vaults

Private vault facilities exist specifically to provide secure physical storage, which creates a fundamentally different business model.

According to Sean, that difference tends to show up in the environment, security and service.

"Private vaults tend to focus on providing a private and discreet environment away from people that are cashing a paycheck or there for other reasons," he says. "Private vaults offer exclusivity, best-in-class security and a concierge client service model."

There is a tradeoff.

Private vault storage will often cost more than customers may have been accustomed to paying at a traditional bank.

For people storing items of significant financial or personal importance, however, Sean believes the more relevant question is whether the facility provides the security, privacy and service they expect.

How to Evaluate a Private Safe Deposit Box Facility

Not all private vaults are the same.

Sean recommends evaluating three areas in particular: security, insurance and accessibility.

Start by asking who is responsible for the facility's security.

"A private vault can't cut any corners when it comes to security," he says. "If they don't have a name-brand security partner, that would be a deal breaker for me."

Customers should also understand whether insurance options are available and what those options actually cover.

Finally, consider how the facility balances privacy with accessibility. A vault can have impressive security, but customers also need reasonable access to their property when they need it.

Security shouldn't require sacrificing convenience.

Refuge Vault Has Seen the Impact Firsthand

The Chase closures aren't an abstract trend for our team.

Over the past 12 months, Refuge Vault has fielded hundreds of calls from Chase customers looking for a new place to secure their valuables.

"Our facility was built for this exact purpose," Sean says. "Our team loves hearing a new client say how relieved they are after finding us."

For many customers, that relief comes from knowing they don't have to fundamentally change how they've protected important belongings for decades. They simply need to find a new home for them.

Received a Safe Deposit Box Closure Notice? Don't Wait Until the Deadline

Sean's biggest recommendation for customers who receive a closure notice is simple:

Don't wait.

When a bank sends closure notices to a large group of customers, many of those people begin searching for alternatives at approximately the same time.

But vault space isn't unlimited.

"When letters go out, it triggers a wave of people looking for a solution to the same problem," Sean explains. "All vaults have capacity limitations, so those who act first will have the best chance of finding a suitable replacement."

Refuge Vault currently has safe deposit boxes available at our Del Mar facility, although availability for certain box sizes is limited.

For customers affected by the Chase safe deposit box closures—or anyone looking for an alternative to storing important valuables at home—the most important thing is to evaluate your options before you're facing a deadline.

Look closely at security. Ask about insurance. Understand how access works. And choose a provider whose long-term business model is aligned with something your bank may no longer want to provide:

Protecting the things you can't replace.