New Yorkers Johanne and Peter Burnside do their banking more than 2,000 miles away, in Tucson, Ariz.

Their bank houses neither cash nor jewels. What the Burnsides have deposited are their “biological insurance policies” — vials of blood taken from the umbilical cords of their daughters, Grace, 2, and Lily, five weeks.

Grace and Lily Burnside are among 150,000 youngsters whose frozen cord extracts are stored for their families’ exclusive use at the 11-year-old, privately held Cord Blood Registry, which generated more than $70 million in revenue last year.

Cord blood is a source of viable stem cells. For more than a decade, stem cells derived from cord blood have been used to treat patients with leukemia, Sickle Cell Disease, and various genetic and autoimmune disorders. Increasingly, parents are storing their children’s cord blood should it one day prove life-saving.

Chances are slim — one in 400, according to a recent study — that a privately banked specimen will ever be needed for transplant purposes. Still, many parents are shelling out thousands of dollars to store their children’s cord blood, which might otherwise be discarded along with the umbilical cord. Vials or bags of cord blood, taken by delivery room physicians, are sent to private banks, where the cells are separated and placed in liquid nitrogen refrigerators.

There are more than 20 private banks nationwide — Alpha Cord, Via-Cord, and newcomer DomaniCell, among them — and many companies advertise in pregnancy magazines and through direct mailings. “You only have one chance to collect and save your baby’s genetically unique cord blood,” the Cord Blood Registry’s three-page advertisement in the October/November issue of FitPregnancy, reads. “If you don’t save your baby’s cord blood today, you could be passing up the medical treatment option for tomorrow.”

Cord blood storage doesn’t come cheap. Most private cord blood banks charge an initiation and processing fee of $1,000 to $2,000, with some offering financing options. Annual storage payments range between $100 and $150.

“Science and medicine is only going to progress as time goes along,” Mrs. Burnside, a 36-year-old mother who lives in Manhattan’s Flatiron District, said. “There’s going to be a lot more you can do with the cells. The potential is there and, because we could afford it, we felt it was an opportunity we shouldn’t miss.”

Some parents and physicians say the private banking industry plays on the fears of expectant mothers and fathers, roping them into paying an annuity on blood that they’ll probably never use.

On the Urbanbaby.com New York message board, parents regularly debate the hope versus the hype of cord blood banking. “Glad it’s banked, pray I never need it,” one contributor wrote. Another contended that its only advantage is: “You get to rid yourself of all that annoying money.”

Deciding that the hope outweighed the hype, James and Christine Thalacker of Far Hills, N.J., banked the cord blood of their two younger children at LifebankUSA in Cedar Knolls, N.J. They paid lump sums of about $3,000 a child to store the blood until the youngsters turn 18.

Now pregnant with her fourth child, Mrs. Thalacker, 38, said she plans to bank both the cord blood and the blood derived from the placenta when she gives birth. “With kids, you want what’s best for them — and you can’t be too careful,” she said. “If something were to happen, God forbid, and you were able to find a cure through their own stem cells, that would be wonderful.”

At some hospitals, parents who can’t afford private banking can choose to donate cord blood free of charge to one of about 20 public banks. Cord blood housed in public facilities can be used for medical research, or made available to anybody in need of a transplant.

Rep. Christopher Smith, a Republican of New Jersey, said cord blood stem cells have been responsible for “miraculous recoveries,” and yet their promise is “the best kept secret in America.” Mr. Smith is the author of the Stem Cell Therapeutic and Research Act, which calls on the federal government to increase by 150,000 the number of publicly available cord blood specimens.

He said the controversy surrounding the more divisive embryonic stem cell research has overshadowed the importance of cord blood banking.

Proponents of embryonic stem cell research, such as the president of the Coalition for the Advancement of Medical Research, Sean Tipton, said one type of stem cell research should not supplant another. “Stem cells are an important election issue, and even anti-embryonic stem cell politicians like Chris Smith want to pose as being pro-stem cells, when, in fact, they’re against the most promising form, which is embryonic,” Mr. Tipton said.

President Bush, who earlier this year deployed the first veto of his presidency on a bill that would expand federal funding for embryonic stem cell research, last year signed the Stem Cell Therapeutic and Research Act.

Last month, the Human Resources Services Administration allocated $1.9 million to establish the National Cord Blood Coordinating Center, a clearinghouse for all cord blood units stored in public banks. The agency will soon announce plans to hand out $14 million in grants to several public banks attempting to increase their cord blood supplies, a HRSA spokesman said.

Estimates of the amount of publicly available cord blood units vary widely. A professor of pediatric medicine and pathology at Columbia University Medical Center and NewYork-Presbyterian Hospital, Mitchell Cairo, puts the number at 75,000 to 100,000 units. (The New York Blood Center’s National Cord Blood Program on East 67th Street, thought to be the largest public facility of its kind, houses about 35,000 publicly available cord blood units.)

Dr. Cairo, the chief of pediatric transplantation at NewYork-Presbyterian’s children’s hospital, has performed more than 150 cord blood-derived stem cell transplants. Using your own or a relative’s cord blood can significantly cut down on the risk that the body will reject a transplant, he said.

Private banking is “a great idea for those with known family members affected by diseases previously demonstrated to be curable with cord blood transplants,” Dr. Cairo said.

Where there is no family history of such diseases, he said cord blood specimens would be most useful in public banks. “It’s basically, ‘Do you want to do something for the public good?’ or ‘Do you want to do something that would only benefit your own family?'” Dr. Cairo said.

However, an Upper East Side pediatrician, Barry Stein, said the parents he sees are more likely to go the private route. “Many are suspicious of any public health initiative,” he said. “They say, ‘It’s my kid’s blood. If I need it, how will I know I’ll have access to it?'”

He added: “When people ask me, ‘Should I do it?’ I say, ‘There’s no downside. You may never be able to use it, but there’s no downside.’ Twenty years down the line, you don’t want to kick yourself for not doing it.”