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JPMorgan Chase to Phase Out Safe Deposit Boxes

JPMorgan Chase & Co. is starting to phase out safe deposit boxes, which are more associated with old-fashioned bank branches than today’s smartphone apps.

September 30, 2022
4 minutes
minute read

JPMorgan Chase & Co. is starting to phase out safe deposit boxes, which are more associated with old-fashioned bank branches than today’s smartphone apps.

Chase bank is no longer allowing customers to rent new safe deposit boxes. If a Chase bank branch is closed, its safe deposit boxes will also be closed, and their holders will not be able to open a new box at another location.

JPMorgan spokesman Tom Kelly said that the decision to stop offering new safe deposit boxes as of December 2021 is a business decision, but that it does not affect current customers who have boxes.

Banks have long offered safe deposit boxes as a way for customers to store valuables and important documents. However, the future of the business is uncertain as US lenders close branches at a record pace. Even as financial firms open new branches, they often lack the large vaults needed to house safe deposit boxes.

Lenders have traditionally associated safe deposit boxes with losses, as they require real estate and staff to run the service. However, safe deposit boxes cater to lenders' longest-tenured and wealthiest account holders, with the average box holder making an income 14% higher than the national average, and most at least 50 years old.

According to David McGuinn, president of Safe Deposit Specialists, building a vault and installing a security system can cost upwards of $10,000. Additionally, staff must be trained on how to use and maintain the vault, which adds to the overall expense of the service.

The business can trace its roots back more than 150 years, when Francis Jenks started a standalone safe deposit box business, McGuinn said. Jenks built a fire-proof building at the corner of Broadway and Liberty Street in New York’s financial district, which was outfitted with armed guards, according to an 1865 New York Times article.

The US Supreme Court didn't pass a law allowing banks to offer safe deposit boxes until the 1930s, according to the Arkansas Law Review. Since then, lenders have built millions of safe deposit boxes around the country. Prices for safe deposit boxes vary by size, location and bank, with an average annual cost of $60 per box, according to researcher ValuePenguin.

According to McGuinn, lenders should realize that the people who need storage units are some of their biggest depositors, even though there is not a lot of income in it.

Cathy Hills
Associate Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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