Don't discard your bank statements too soon. Here's how to safely store it and for how long
When you're storing important bank documents, it's better to be safe than sorry. Whether you receive most of your financial information online or through the mail, here's what you need to know to ensure your personal financial information is as safe as possible.
How long should I keep financial documents?
Patrina Dixon, CFEI and owner of P. Dixon Consulting, LLC recommends keeping any important financial documents for up to seven years in case you're audited.
You can store your paper documents in a locked filing cabinet. Safe deposit boxes may be worth exploring if you have important business documents. However, it's generally not recommended for documents you want others to have easy access to, like your will or final wishes.
Dixon also notes voided checks, in particular, need to be voided and stored properly.
"You should have 'VOID' written out across the entire check and with a red marker if possible," says Dixon.
Dixon adds that you may keep the voided check until you know that any following checks have been processed.
After seven years, you may discard financial papers. However, you'll need to take precautions to ensure your personal information is safe. Instead of simply throwing away your documents, shred them first and make sure your personal information can't be deciphered.
Is it worth keeping old bank statements?
Dixon says people often make the mistake of not keeping financial documents. Whether you get online bank statements or paper statements, Dixon says you'll want to make sure you are keeping them and storing them properly.
It's worth keeping old bank statements in case you are audited by the IRS and need to review information from a previous tax return.
The IRS may ask about returns filed in the last three to six years. Any of the following financial documents may be needed to verify your income, credits, or deductions claimed for a tax return, according to IRS:
If you made a purchase with your debit card or set up online bill pay through your bank account, your bank statement may include pertinent receipt or billing details.
How can I safely store my documents online?
Online financial documents still need to be kept securely as well. Online documents can be stored safely on a flash drive, or you may keep the document encrypted so it's protected by a password on a personal computer.
Dixon recommends installing anti-virus software if you're concerned about a potential security breach. You'll also want to review your software to see if it's up-to-date.
If you use a public computer to check your online bank information, Dixon says you should clear your search history before you finish using it. Also, if you print out any documents, you'll want to double-check you have all your documents in case you accidentally printed something more than once.Sophia AcevedoJunior Banking ReporterSophia Acevedo is a junior banking reporter at Insider who covers banking and savings for Personal Finance Insider. She joined Insider in July 2021 as a fellow for the Personal Finance Insider Reviews team. Before joining the Insider team, she was a freelancer based in Los Angeles and worked briefly in publishing. She also graduated from California State University Fullerton in 2020. You can reach out to her on Twitter at @sophieacvdo or send a quick email at firstname.lastname@example.org. Read more about how Personal Finance Insider chooses, rates, and covers financial products and services >>