Are banks necessary?

[disneysteve]

I've never heard of this kind of place. Are they affiliated with banks? Where are the vaults at? Are they FDIC insured? Would you feel as comfortable leaving an extremely valuable item in them as you would with a typical bank SDB?

It was a free-standing place. Kind of looked like a bank from the outside. I was never inside but from the signage and advertising I recall it was basically just a vault. I would assume it had little cubicles like the bank has where you can have privacy while dealing with the contents of your box. I have no idea what the fees were or how they compared to a bank.

I've never had a SDB myself but I think I'd feel just as comfortable using a place like that than I would a bank. I've never had anything of such great value that I needed to lock it up somewhere other than in my home.

You mention FDIC which is not really relevant here. The contents of your SDB aren't insured by the bank. You need to insure them yourself (might be covered by your homeowner's policy but you need to check).

[Joan.of.the.Arch]

This story about private vaults is old, but interesting.

http://www.reuters.com/article/2011/04/15/us-financial-boxes-idUSTRE73E5GC20110415

[disneysteve]

Its a generation thing. You're older...and like most older people you have a difficult time with change.

Really? Let's skip the personal insults here please.

[phantom]

I feel the need to point out that prepaid cards use banks to hold the funds on the cards. The consumer doesn't need a bank account and may not even realize that there's a bank behind the card, but the bank is still there. So, the use of a prepaid card does not eliminate the need for banks at all. At best you might say prepaid cards eliminate the need for individual checking/savings accounts at banks. But, banks are needed for prepaid cards to work the way that they currently work.

[GREENBACK]

I've never had a SDB myself but I think I'd feel just as comfortable using a place like that than I would a bank. I've never had anything of such great value that I needed to lock it up somewhere other than in my home.

You mention FDIC which is not really relevant here. The contents of your SDB aren't insured by the bank. You need to insure them yourself (might be covered by your homeowner's policy but you need to check).

Not sure why I threw the FDIC thing in there. I already knew that. For $50 bucks a year I like having a place with a really big safe vault that's pretty much immune to anything nature or man can throw at it ( I hope!). I guess the place you mentioned would be comparable. I keep a few heirlooms and things like my house deed, titles, some cash, etc. in mine. I certaintly don't have as safe a place at home as they do.

[disneysteve]

For $50 bucks a year I like having a place with a really big safe vault that's pretty much immune to anything nature or man can throw at it ( I hope!). I guess the place you mentioned would be comparable.

I think bank SDBs are great. I was just making the point that you could get that service without a bank. I'm sure the private vaults charge more since they aren't subsidizing the business with their other services.

[Thrif-t]

So what happens if you lose this prepaid card, do you lose all your money?

[nick__45]

I can't imagine living life with nothing but prepaid credit/debit cards. Seriously. How would that even work? I can't pay my mortgage with a credit card - it's paid from my bank account. Same with many of my utilities.

I disagree with the premise that this generation isn't finding banks necessary.

I know people who pay rent and mortgage with money orders. The one fellow I hung out with awhile back actually drives 20 miles to put his money order in the bank's physical deposit box.

[GrimJack]

Quite a few of the refunds going out this year are going onto cards rather than being direct deposited or mailed. This is a bonanza for refund fraudsters but with so many banks charging all sorts of fees, it does not pay to have a bank account until you have money.

T*urboT*x was hacked (they publicly deny this) recently. I am finding fraudulent tax returns that have everything correct except for dependents (and, of course, the financial info) - in one case, I had to ask for the names and # of the dependents before I could verify ID theft; the fraudulent return had the couple's name, address, ss# and children but added a non-existent nephew. I hate working the ID theft toll free line.