How long should those bank statements stay in your personal filing cabinet? According to most information found online, at least 7 years.
In a world of electronic banking records, there are still people who retain physical forms and papers for the appropriate length of time. Even if the banking records are electronic, there should be some form of physical retention in case the bank loses the records or the records are deleted after a given period of time.
Retaining Electronic Banking Records
While the majority of banking records are now available in electronic form, most banks only keep these records for online access for 18 months or less. According to common record retention methods, banking reconciliation, bank statements, cancelled checks and electronic payment records should be kept in paper form for a minimum of 7 years.
Retaining Physical Banking Records
The same time frames go for physical retention of paper banking documents as electronic banking documents. The electronic forms can be printed for safer keeping, but an electronic version can also be kept on an external hard drive. If paper forms are the only option, a great scanner can be used to upload the files in electronic form to an external hard drive for safe keeping.
Using Software to Keep Track of Banking Statements
There are several software suites that make keeping track of bank statements quicker and easier. Quicken and MSMoney are two software suites that allow the user to connect their software to their online bank and download the electronic documents. These software suites also back up the data on a regular basis in order to keep the files safe and sound.
The back up should never be saved onto the local hard drive of a personal computer. If the computer hard drive fails, the information is lost and that could be devastating for personal banking accountability.
Trusting the Bank With Your Records
At no point in time should the bank be allowed to keep the sole source of banking records. The bank retention will be far less time than the physical retention needs to be even with the switch to electronic and paperless banking. The bank does not have the space (hard drive) to keep every clients banking records for the 7 years required. Often, paperless banking statements are kept for a maximum of 18 months.