When determining if you can afford the payments for a loan, a rental home, or something else, they may request to see your bank statements to verify your income. Bank statements can also come in handy to show proof of purchases made by debit card, check, or bank transfer should someone claim you owe them money.
And if you need to use a product warranty or file an insurance claim, a bank statement could help by confirming you made the connected purchases. In some cases, the IRS suggests you keep records longer than three years due to the amount of time the agency can audit you. Having a way to store and keep track of your statements can make it easy to access information if and when you need it.
Here are a few recordkeeping tips for hard-copy records:. With electronic statements being more and more common, you may opt to keep virtual records. However, should you decide to go that route and keep them saved on a single device, you run the risk of losing records if the device crashes, gets lost, or is stolen. Consider backing up records on a secure secondary storage device or in a secure cloud environment.
Another option with digital statements is contacting your bank to find out how long it keeps statements, so you can access them on demand as needed. Time frames and fees can vary by institution and account type, so check before going this route.
Keep your tax returns for seven years if you file a loss for bad debt or worthless securities. Pay stubs should be kept for at least 12 months so you can accurately file your taxes the following year. However, according to the IRS, you may want to keep your pay stubs on record for three years to back up your tax returns in case you are audited. If you use a credit card for business , make sure you can access the records for at least three years to serve as proof if needed for your tax returns.
Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. How long you should keep your bank and credit card statements depends on how you receive them.
Either way, you should review your statements at least once a month to make sure there are no ugly surprises in there. 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. There may be some satisfaction in seeing the actual piece of paper that you signed, although such documentation doesn't exist for electronic purchases.
In any case, whether you have a paper filing system or access your records online, there may come a time when you'll need your old statements for any of several reasons. If you haven't opted out of monthly bank statements by mail, keep them for a minimum of one year. If your account is online-only, review the deposits and withdrawals monthly to make sure they're correct.
Alternatively, if you're great at data entry, you can record your income and expenses in a bookkeeping program or a spreadsheet. After one year, it's safe to shred and discard the paper with one big exception: Anything that documents a tax deduction should be kept for at least three years. The IRS says it rarely goes back farther than that in audits, although it reserves the option to do so.
If your account is online, the records will be either archived online or available by special order from the bank or financial institution. You need to put a system in place to avoid creating yet another mountain. Buying a shredder or using a document disposal company should keep your details safe against identity theft. Many companies are moving towards electronic statements to help you reduce your paperwork and give the environment a boost at the same time!
You can also make electronic versions of your old documents with a scanning app such as CamScanner, Genius Scan or Scannable. Record-keeping apps like Evernote or Sign-N-Send can help. Think about storing important documents in a fireproof safe or offsite in a safety deposit box. For extra security, you can back up online files on an external hard drive or a cloud-based solution.
Organising your paperwork also presents the ideal opportunity to review your financial commitments. Hang on to any relevant statements until the issue is fully resolved. Other documents related to your bank, credit card and investment accounts abound. Here are a few types and how long to consider saving them:. It's possible to access past statements without keeping copies yourself, but you may choose to keep your own statements on file anyway. Your financial institution stores information in their system for multiple years, and may be able to provide you with copies of older statements on request.
You can also request past copies of the statements you normally receive by mail, sometimes for a fee, by contacting your bank or card company.
The length of time your financial institution will store these records—and make them available to you—varies, so it's a good idea to do a little research on your bank's policy. Some card companies only provide online statements for the previous 12 months, for example; you may have to do extra legwork or pay for missing statements and wait a few days or weeks to get anything beyond that.
Some banks, including Wells Fargo, retain account statements for up to seven years on checking, deposit, home mortgage, trust and managed investment accounts.
At other financial institutions, five years is the norm. If you've used your financial statements to back up information on your tax returns, you may want to keep your own paper or digital copies, rather than relying on the bank to do it. That way, you can ensure that you have these documents on hand for a full seven years. And at any time, you'll be able to access and refer to this information without having to track it down online.
When you no longer need your documents, be sure to shred the paper files and completely delete the electronic copies including any backups. Free software for Windows and Mac computers can help make sure these files can't later be recovered by someone up to no good.
Maintaining a Paper Trail The bank and credit card statements you receive provide concise and comprehensive information about what's happening with your accounts. It can also be key supporting documentation to prove yourself if your finances are ever called into question.
Reviewing statements can help you spot fraud and other irregularities, such as an unusually high bill. And maintain files securely for at least seven years if you've used your statements to support information you've included in your tax return. Need to Pay Down Debt? A debt consolidation loan might be the best way to pay off high interest debt.
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