A Sand Castle increases Sanity when standing nearby, however it only lasts a single Day, so it is best to place it when the player will be near it for a significant period of time. When the day is over and the Sand Castle decays, it will drop 1 Sand, 1 Seashell and 1 Palm Leaf. It cannot be set on fire or destroyed with a Hammer, however it can be dug with a Shovel returning the same resources.
Sand Castles can only be placed on barren land without any Turfs, but once they have been deployed it is possible to place any turfs underneath them.
Using more than one Sand Castle is not recommended, as the overall sanity output is decreased if standing in between 2 of them, so it is only advised to pair a single castle with another sanity restoring object/item
The Sand Castle, despite being likely intended for placement only on sand, can also be placed upon a Snakeskin Rug.