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The length of time you keep your bank statements varies according to the type of account and how you get them. Most financial institutions offer electronic statements via internet banking and keep them available for years. Wells Fargo, for example, maintains deposit account statements for up to seven years. Check with your bank or credit union about their specific policies.

If you still receive paper statements, save them for at least a year. If you have an issue with one of your accounts that requires you to access those records, this makes it much easier to do so. When discarding paper statements, shred them to ensure that no one may access your account information.

When You Need the Records

About two-thirds of Americans now use digital banking, either via a phone app or on a personal computer. More than half continue to get their bank and credit card statements by mail, though. Not surprisingly, older consumers are much more likely to prefer paper documents.

For simple bank statements, such as those for checking or savings accounts, you may not need the statements for much more than a standard monthly review of account activity. However, there may be times when you need a record of a transaction from several months ago, and that bank statement might be all that is available. For such cases, it’s a good idea to have at least a year’s worth of bank statements.

How Long Should You Keep Your Bank Records?

Most financial experts say you should keep your bank statements in either digital or hard copy for at least one year. Once they’ve been in the filing cabinet (or your computer hard drive) for one year, you can finally shred the paper or press the delete button.

According to the IRS, you should keep your records for three years from the date you file your original return or two years from the date you paid the tax. Yet, the IRS may ask about returns filed in the last three to seven years, which is why it’s always a good idea to keep your bank statements for longer.

Some of the documents that you may need to verify your income, credits, or deductions claimed for a tax return include receipts, bills, canceled checks, legal papers, loan agreements, business logs, insurance reports, employment papers, medical and dental records, and more.

Keep in mind that although the IRS recommends keeping your records for at least three years, you’ll want to keep a permanent PDF file copy of each year’s tax return and any payments you make to the government.

7+ years.

Although this depends on your filing circumstances, the IRS may ask you for supporting documentation for three to seven years after you file a return. Therefore, it’s a good idea to save any document that verifies the information on your tax return for seven years or more.

1–3 years.

Experts recommend keeping a PDF copy of your monthly bank and credit card statements. You should also hold on to pay stubs so you can easily access them and use them to verify the accuracy of your Form W-2 during tax season.

Less than a year.

You should consider keeping your utility, cable, and cell phone bills for tax purposes if you’re self-employed.

Why You Should Keep the Statements

Access to a record of your recent purchases, bill payments, and payroll deposits is necessary for a number of reasons, not least as a proof of payment in case of a dispute. You should review your bank account activity regularly for evidence of identity theft and debit card fraud. The statements provide verification of illicit activity and are used to recover any damages.

  • For Tax Purposes

You may need your bank statements when you do your income taxes in order to verify your income and costs such as charitable contributions and business expenses. Bank account statements confirming large purchases or payments may also be worth keeping. For example, you might need proof of purchase to file an insurance claim or use a warranty.

Read Also: Why Does it Cost Money to File State Taxes?

You can shred automated teller machine (ATM) receipts once you reconcile them with your account records. Deposit and withdrawal slips can be shredded once transactions are verified with the monthly statement.

Why is it Important to Keep a Bank Statement PDF?

Keeping your bank statements as PDF files can be helpful when it comes to storing information that you may want to access later, for example, to file taxes. Here’s a list of other reasons why keeping a bank statement PDF is important:

  • Financial planning. By reviewing your bank statement, you can better understand and track where you are spending the most every month. This way, you can plan your finances more efficiently and understand your spending habits.
  • Business expenses tracking. If you’re running a business, you’ll want to keep a digital copy of your expenses by saving every bank statement you get. This way, you can identify where to reduce costs, if necessary.
  • Rental or housing applications. Landlords and property managers ask for proof of income when applying for housing or a rental agreement. You can have your bank statements handy to submit them quicker by saving them as PDF files.

Banks are required by law to keep most records for at least five years, although many banks and financial institutions usually keep their members’ account statements available for up to seven years. You can check with your bank to see how long it will keep a physical version of your financial records.

On the other hand, the general timeline for how long banks keep a digital PDF online version of members’ bank statements is less than seven years. After you review your online bank statement, this will usually be archived and available to you online for up to 18 months. However, if you need a paper copy down the road, your bank should be able to provide you with one.

The best way to store bank statements is digitally as PDFs.

If you have dozens of bank statements, though, managing so many documents can be cumbersome. Here’s how to simplify your bank statement storage:

  1. Convert to PDF. Convert your bank statements to PDFs online to maintain formatting and make them easier to store.
  2. Merge PDFs. Then you can merge them online to make one easy-to-store file.
  3. Compress PDFs. That many pages in one PDF can make huge file sizes. Compress your PDF online so it takes up less space on your storage device.

That one manageable, compressed PDF can then sit happily in your computer’s hard drive or cloud storage for as long as you need.

You can also scan bank statements to PDF using a free scanner app for safe digital storage and make sure you’re storing them as a secure PDF to protect sensitive information.

Many banks maintain monthly customer statements online for at least five years and they are easily accessible through their online banking apps and sites. These statements usually come in printable formats. Summaries of transaction information are frequently available for download.

You may be able to get hard copy statements from your bank going back a number of years. Some banks charge search and printing fees for this service, as it cannot be done at the branch level. Older statements are handled in a back office.

For safety, it’s best to keep any hard copy bank statements in a fireproof safe in a secure location. Electronic statements should be maintained in a password-protected file.

Financial Records To Save And What You Can Throw Away

If you’re like many of us, the volume of paper that enters your home can be overwhelming at times. Keeping track of everything from mail to receipts to paperwork can be difficult. While many organizations are transitioning to paperless systems, the mountains of financial papers in your home make the opposite impression.

When you make life or financial decisions, there is usually a paper trail. The same holds true when you buy, sell, or insure something. Every year following tax season, you’ll have another stack of documents to add to your file. What should you save, and what can you put in this week’s trash collection—that is, what needs to be shredded and properly disposed of?

The main reason for filing away financial documents is to be able to defend your annual tax returns if needed, but there are other reasons to save certain types of paperwork. Here’s a quick guide to what to do with your financial documents: how long you need to save the important ones, how to store the documents you do retain and how to safely dispose of the rest.

Some financial documents should be kept for the long term. Here’s a breakdown of documents to save, based on the time they should be kept.

Seven Years or Longer

When it comes to taxes, it’s best to keep any tax records for at least seven years. The IRS statute of limitations for auditing is three years. However, there are circumstances where they can go back as far as six or seven years, for example, if you underreported income by 25% or more. State statutes of limitations can vary, so check with a tax professional on the limitations in your state.

Your best bet is to hang on to your tax returns as long as possible. If you ever face a tax audit, then you’ll have all the information you need. You also should consider saving documents that verify the information on your returns for at least seven years, like W-2 and 1099 forms, receipts and payments. If you have receipts related to assets, like receipts for home remodeling projects, keep these for as long as you are the owner.

One Year

Documents that fall into this category include non-tax-related bank and credit card statements, investment statements, pay stubs and receipts for large purchases. Keep these records on hand for a year if you need them to support your current-year tax preparation or as proof of income when making a large purchase.

The Federal Trade Commission suggests holding on to your paid medical bills for a year before tossing them—unless you have an unresolved insurance dispute, in which case you would retain the medical bills until the dispute is resolved. Medical bills are confusing, and having records on hand to dispute payments or errors is wise.

Many banks and credit card issuers offer electronic statements now, so you may not need to keep paper copies on hand, which will cut down on excess clutter. If keeping other documents around longer term makes you anxious, you can opt to scan them to create electronic copies and then dispose of the original paper documents.

Less Than a Year

Some documents don’t need to take up valuable space in your home for very long. For example, don’t worry about keeping receipts unless they pertain to:

  • Products under warranty
  • Your tax returns
  • Insurance claims

You can toss most monthly bills after you pay them, or after the payments have been credited to your bank statement. If you end up needing to go back to verify anything, see if you can access past bills through online account access. Many companies keep past bills and invoices available online for the past few months or longer.

Banks typically don’t mail canceled checks back to you anymore, but if yours does, most canceled checks are okay to shred once you’ve verified your bank statement is correct. Some canceled checks should be saved, though, if they are related to tax returns, like any charitable giving.

What Financial Documents Should You Keep Forever?

We’ve looked at documents that are okay to throw away after a specific time, but there are plenty of documents you should hold on to indefinitely. Important papers to save forever include:

  • Birth certificates
  • Social Security cards
  • Marriage certificates
  • Adoption papers
  • Death certificates
  • Passports
  • Wills and living wills
  • Powers of attorney
  • Legal filings
  • Military records
  • Retirement and pension plans
  • Inheritance documents
  • Beneficiary forms

For anything you’ve bought or insured, you should save the related documents for at least as long as you own them or until the warranty ends. It won’t hurt to keep them around longer, though, just to be safe. This includes titles, deeds, insurance policies, warranty documentation and more.

Health insurance policies and related documents are important to keep long term, too. So long as your health insurance is active, you should keep these records. If your coverage ended or you’ve moved to another insurance company, go ahead and toss paperwork once you’re sure you won’t need it. The same is true if you receive disability or unemployment benefits. Keep the documentation until you know you no longer need it.

If you have financial records or documents you aren’t sure you’ll need, err on the side of caution. Keep any documents until you are positive you don’t need them.

How to Store Financial Documents

You can cut down on clutter by creating a reliable system for storing your financial documents. Keeping your documents safe is equally important. When storing your documents, you’ll want a storage solution that is:

  • Easily accessible
  • Protected from theft
  • Protected from the environment/weather/damage
  • Well organized

Whether you have paper documents or electronic versions, here are options for storing your financial documents safely long term.

Paper Storage

Many people choose to keep documents stored in a filing cabinet. Use file folders to organize paperwork by subject, year or another method of your choice. Bankers boxes are another storage option, but these are more susceptible to water damage.

For your most important documents, a standard filing cabinet might not be enough. The use of a home safe may be a better option. Look for a safe that is fireproof and waterproof for maximum protection. A home safe doesn’t have to be elaborate or expensive, like something you’ve probably seen in the movies (no need for hidden wall safes behind artwork). A simple lockbox you can grab and go is perfect for storing documents in the event of a home fire or flood.

Safe deposit boxes used to be a popular method for storing valuables, including essential documents. Not all bank branches offer safe deposit boxes today, but it can be an option if you prefer keeping these documents offsite. Keep in mind that you are at the mercy of the financial institution as to when you can access your safe deposit box.

Electronic Storage

If you’d like to move toward less paper, there are plenty of digital storage options.

Many financial institutions and businesses now let you opt for electronic billing and statements, either through email or online account access. Some banks charge a fee for paper statements now, as electronic paperwork becomes more readily available.

For other documents, you can use a scanner to scan them into your computer, or you can take photos using your cell phone.

Keeping all of your documents on your computer isn’t very efficient and can bog down your system. Other digital storage options include external hard drives, like HDDs and SDDs, which are compact solutions for storing massive amounts of electronic data. An even more compact solution is storing electronic paperwork on a flash drive, although flash drives also are easier to misplace or damage.

If you go the digital route, it may be a good idea to create multiple backup copies in case one of them is damaged or fails. Digital backups take up much less space than having multiple paper copies of your important documents.

Another option is to go with cloud-based storage for essential paperwork. The past several years have seen an explosion of cloud-based solutions, including:

  • Dropbox
  • Google Drive
  • Microsoft OneDrive
  • iCloud
  • Amazon Cloud Drive
  • Box
  • NextCloud
  • iDrive
  • Carbonite

Using cloud-based storage not only saves on space, but also can be great for organizing and keeping your documents secure, since most services guarantee protection through encrypted networks. Many cloud-based solutions allow access through mobile devices, making your documents accessible almost anywhere in the world.

If you do end up choosing a digital storage solution, make sure you don’t need a physical copy or original document in the future. The last thing you want to do is shred something to save space, only to need it five years later.

Final Thoughts

A financial life necessarily involves a significant amount of documentation—from monthly bank statements to insurance documents to the various materials required to file your taxes. By learning what needs to stay and what’s free to go, you can minimize the amount of materials you accumulate over time.

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