Storing jewels and other valuables such as documents carries many risks. In the past, renting a bank locker was considered a safe and simple solution. But last year, the RBI said banks weren’t liable for items missing from their lockers.
There have also been a few bank break-ins where items have been stolen from bank lockers. Given these, it would be worthwhile to re-consider the once default choice of rented lockers from banks and other private providers.
A good alternative is buying and installing a safety locker in your house, as it has a few advantages. One, you are not tied down by various restrictions placed by the locker provider on the working hours and ongoing access. For example, while private locker providers are typically open all days of the week, they are still closed on holidays and not open at night.
Banks also require that you operate the locker at least once a year; if not, the bank may ask you to provide a reason for not doing so. If there is no response, banks can break open the locker after giving due notice.
Two, a house locker is convenient and safe when it comes to retrieving your possession.
For instance, with a rented locker, you may have to travel some distance, risking theft along the way.
Three, the costs of buying and installing a locker at home may become comparable to renting one, over 5-7 years. The annual rents for lockers vary with the size of the locker and the location of the facility (higher in cities than rural areas).
A small locker at an SBI branch costs ₹1,100 annually in a city (₹800 in semi-urban and rural branches). An extra-large one — 10 times larger by volume — costs ₹8,000 in cities (₹7,000 in semi-urban and rural locations).
Banks may require you to open an account with a balance of three years’ rent. Private providers ask for a refundable deposit of three years’ rent; the rent could be marginally higher than that charged by public sector banks.
Buying a medium-sized electronic locker — about thrice the size of a small locker, costs ₹8,700 — about thrice the annual rent of a medium-sized non-electronic locker.
Four, there would be no issues such as who can operate the locker and how many times. Banks, for example, may limit the number of times you visit the locker, or charge for using it often.
For example, SBI charges ₹100 per access after crossing the limit of 12 visits a year.
Also, banks allow only two joint owners to operate the locker. You also need to have a nominee who can take over the operation, in case the locker owner is no more.
That said, there are a few drawbacks to storing your valuables at home.
You miss out on the security solutions such as a guard on duty, surveillance cameras and other intrusion-detection devices that locker providers have.
There are different sizes and models of house safety lockers. One key difference is the type of lock.
The common one has mechanical locks with a key. There are other expensive ones that use electronic key pads, swipe cards or even biometric systems (fingerprint).
These models are 30-50 per cent more expensive than the mechanical ones and often have a key option. For example, Godrej’s 23 litre electronic model (E-Laptop) costs ₹11,522, while the mechanical version (M-Laptop) costs ₹8,000.
Another aspect to consider is the weight of the locker. A heavier one is preferable as it makes it difficult to carry or break open.
These cost more; for example, a 30 litre electronic safe from Pepperfry that weighs 14 kg costs ₹12,200, while an 18 kg one is priced ₹13,530.
You must also consider where to keep the locker. It is better to buy and install one at the time of construction so that you can hide it from direct view. And rather than just place the locker, it is advisable to bolt it to walls or floor so that it is not easy to take away the safe.
There are also lockers that are fire-resistant, which would be helpful for storing documents when there is risk of electrical or other fire. To enhance safety, you may want to include additional safety devices.
For instance, you can install a CCTV camera and a home-safety system to detect intruders.
One key aspect to consider is the insurance angle. As banks do not take responsibility for loss from their lockers, you must insure your valuables. So whether you rent a locker or have one at home, it is advisable to take an insurance policy. This comes as part of most of the home insurance policies. With an insurance cover, a bank locker may have some advantages.
For example, if there is burglary while the house is locked for an extended period, the insurance provider may deny a claim. Such issues are less likely to occur with a rented bank locker.
The writer is co-founder,RaNa Investment Advisors.