Bank Statements are important financial records that indicate your credit history, your transactions, your income, and relevant financial data. Storing these bank statements is essential as many services and companies demand them as financial evidence or proof. Bank Statements are requested by landlords, real estate agents, universities, colleges, lenders, car salespersons, or mortgage institutions. They also are necessary for tax filings and asking for deductions or grants.
Many of us tend to hoard documents, bills, or bank statements due to the fear or stress that we may need it eventually. But honestly do you need your bank statement of 2009 in 2020? Understanding how long you should store your bank statements and documents can reduce the paper trail in your house and enable better organizational skills for you. Keeping bank statements going back to ten years can be extreme and unnecessary. Save documents, papers, and bank statements going back to five years if you need assurance or may wish to refer to them for bigger purchases.
With digital technology overtaking all aspects of banking and finance, people rely on digital banking or electronic statements instead of paper. Paper statements are provided by banks on request or mailed to the institution/authority requesting those statements. While electronic records and statements exist in your mail or digital record for a long time, saving paper bank statements can require more effort.
Tax-related documents or bank statements required for tax purposes should be stored for at least one to three years. Charitable donations are included in tax-related documents. The reason we specify three years for tax documents is because Government audits or certain purchases like homes, visas, etc may require financial proof for the last one to three financial years.
Some important documents to store-
- Payments you’ve received such as wages, interest, dividends, and rental income
- Expenses related to income such as work-related outgoings or rental repairs
- Sale or purchase of assets such as property or shares
- Donations, contributions or gifts to charities
- Private health insurance
- Medical expenses, both your own and those of any dependants.
You need to keep these documents for five years after you lodge your tax return in case you’re asked to substantiate your claims. And it’s a good idea to keep your Notice of Tax Assessments for five years as well.
People who prefer to handle their own accounting and taxes enter their income, expenses, and taxes in Excel sheets or a bookkeeping program. This enables them to have all the necessary information available whenever they need it.
Financial records or bank statements are archived online and can be accessed upon request to the bank any time you wish.
Bank statements are required to check your financial activity, note any discrepancies, or keep a tab on your expenses. People with joint accounts prefer having bank statements so they can remain updated on their partner’s expenses. Fraud, identity theft, debit card or credit card being stolen are some instances where you may need to confirm with your bank statements regarding fraudulent charges and theft.
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.
It is recommended to shred ATM slips, deposit slips, or credit card receipts while disposing them. There have been several instances where these documents have been stolen from garbage cans and used for fraud or robbery.
Many banks maintain monthly bank statements for their customers digitally for at least five years. These are accessible through apps and digital banking services. For paper bank statements, banks charge fees to print them and require a signature to keep a record and verification of the person requesting the bank statement. Keep your bank statements filed by year and month in a secure location or a fireproof safe. Electronic bank statements should be stored in a password-protected file.
You can buy a shredder or hire a document disposal service to shred your bank statements for you. They are extremely private and confidential so be extremely careful before sharing it with anybody.
Your old bank statements can be made digital with apps and software such as Camscanner or Scannable. For digital and paper bank statements, build a filing system that is efficient and orderly. The manner in which you store your important documents matters a lot. You can hire storage space in a service or store them in a locker or buy a safe to store them in your house. Paper documents need to be stored in a warm, clean, and moisture-free environment. Storing them in the back of a closet or in cardboard boxes in the attic can damage them within weeks or months due to the weather and temperature.
Back up your files or statements if you feel you may need another copy or the backup.
