Time to part ways with safe deposit boxes

"Do be careful with what you put inside the box," the kindly bank officer told me on one of my rare visits to take some jewellery out of my safe deposit box before Chinese New Year.

We had been chatting about the people who use such boxes when she broke the bad news that the rental rate of my box was set to go up. But more on that later.

First, she warned me about the practice of sharing boxes.

A mother shares the box with her daughter, for instance. Assuming the box is solely in her name, the box is sealed immediately when she passes on, and the daughter has no access. And the contents of the box are all assumed to belong to the mother.

When I got home, I pursued this further.

What if the box is not in a single name, but the ownership is registered as "and/or"?

According to Ms Rina Kalpanath Singh of Kalco Law, as soon as the bank is made aware of the death of one of the account holders, the box is normally sealed by the bank, to avoid any dispute as to what items in it belong to the estate of the deceased.

As she warmed to her subject - my impression was that hardly anyone was getting an "A" for proper estate planning in her book - she added that many people keep their wills in the safe deposit box without telling any next of kin of the will's existence or where it can be found.

If information as to the existence of a will has not been lodged with the Wills Registry - an online registry maintained by the Public Trustee - or the executor hasn't been told, the time taken to sort out the estate is extended considerably, jacking up costs.

Of course, the problems regarding safe deposit boxes would not exist if I didn't have one at all.

Growing up, having a safe deposit box symbolised financial adulthood, even more than scoring that exclusive credit card.

But that's not a view shared by many nowadays. I did a casual check among friends and colleagues whom I met over the Chinese New Year period and only a couple owned up to having a box.

Others said: "I don't, but my mother has one."

It's probably the hassle that has contributed to the decline in popularity.

Access is only at limited times, although the hours are certainly longer at non-bank locations such as that of Certis Cisco.

Then there is the issue of the rental rate. Even if it's not a large sum, it's still a few hundred dollars annually.

Banks, too, are apparently none too keen on encouraging customers to have one.

They take up precious space and offer a poor return on capital.

A couple of years ago, a report by the Swiss authorities highlighted the growth of non-bank safe deposit box companies, with some quarters questioning their rapid expansion.

Apparently, many customers were using them for stashing gold and valuables.

Since the contents are known only to their owners, these boxes could pose a money-laundering risk.

For those with nothing to hide and only some important papers to store, a fireproof safe at home could do the trick. But more documents are being stored online.

The Singapore Land Authority's MyProperty portal offers such a service where title documents can be downloaded for free.

Over at Grupp Marketing, one of the largest safe providershere, marketing manager Tristan Ho said the company has noticed an annual increase of about 10 per cent in the sale of safes delivered to residential addresses.

He attributed this mainly to the convenience a safe offers.

The increase in rental rates and reduction of safe deposit box services in Singapore could be other factors, he said.

In any case, spending trends have changed over the years.

For many, paintings, a wine cellar, watches and branded bags are preferred. These can all be displayed to dazzling effect in a home.

A top-of-the-range alarm system is needed, rather than an old-fashioned safe deposit box.

Meanwhile, things are not going smoothly on the safe deposit box front for me.

During my visit, the bank officer told me that a preferential rate I was enjoying was going to expire and a higher rate - practically double - would kick in soon.

If I wanted the preferential rate, I would have to tie up a significant amount of funds.

If not, I would have to get into the queue for a fresh safe deposit box.

Despite my view that boxes are less popular, the queue now stands at 500-strong.

There's probably less retail interest, but sole proprietorships or small and medium-sized enterprises still use them for company documents.

At this rate, it looks like I will have to part ways with that box.

The money I save from the rental of the box won't get me a fancy piece of jewellery - but it will go some way to buying a sturdy safe.

This article was first published on Feb 12, 2017. Get a copy of The Straits Times or go to straitstimes.com for more stories.