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Safe deposit boxes have been used by banks for decades. They were used by customers who wanted to store important documents, and also for storing personal valuables such as jewelry. But now, the service is being seen as a relic of the past and something that’s no longer needed. Maintaining the boxes is expensive, and takes up a lot of space in the bank, as well. Now, JPMorgan Chase has made the decision to phase out the boxes, and customers can’t rent any new ones.
Because of the significant costs that come with having a vault where the boxes are stored, the safe deposit boxes are some of the most expensive square footage any bank has. The program worked well early on, but has been seen as a loss for banks for quite some time. Security is needed when these boxes are present, and employees have to have additional training on how the system works. It becomes cost-prohibitive for the bank, and fewer customers are using them than they were in the past.
Individuals who do use the boxes generally have high net worth, and they keep expensive and valuable objects in their safe deposit boxes. Estate documents are also often stored in these boxes, so it’s likely that there will be some very upset customers as the boxes are phased out. However, the proportion of boxes used is still generally not high enough to justify the costs for having them. Whether this change will lead some people to move their funds to other banks is a risk JPMorgan Chase appears willing to take.
As one of the largest banks, it can likely absorb the cost of losing some of its customers over the lack of a safe deposit box. The boxes are not going away immediately, and will be phased out over time. But new customers to the bank will need to keep their important valuables elsewhere, as boxes won’t be available to rent.
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