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Bank Statements - To Keep or to Trash?

by Caldwell Trust
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When it comes to banking, nowadays you can virtually do everything online. In fact, some online-only banks have begun to emerge in the market as strong contenders compared to traditional brick and mortar establishments. While it’s great to have the ease and freedom to bank wherever, whenever, it is important to keep hard copies of certain bank statements on file.

Having these records on file can be useful in an emergency, if your bank’s website is down, or in the unfortunate event of hackers stealing your identity. It’s necessary to have hard copies so that you can keep track of your financial situation in case of a dispute. Having said that, you don’t need to keep everything. In this article we’re going to take a look at bank statements and what you can toss, versus what you should hold on to.

Breaking Down 'Bank Statement'

A bank statement is a record, usually sent to the account holder once a month, on a fixed day. It is a document that summarizes all transactions (deposits, withdrawals, checks paid, interest earned, service charges, penalties incurred etc.) on an account between the time of the previous statement to the current one. The opening balance from the previous month/statement combined with the total of all transactions during the period should result in the closing balance for the current statement.

Once you get your bank statement, you should carefully review it to check for errors. Be on the lookout for incorrect or transposed numbers, as well as unauthorized transactions. If any discrepancies are found, they should be reported as soon as possible to your bank.

How Long Should I Keep My Bank Statements?

Generally speaking, keeping your bank statements for a 12-month history is the best practice for document retention. But, if you have records related to your taxes, you need hold onto them for three years. Also, any documents related to business expenses, home improvements, mortgage payments, and large purchases should be kept for as long as you need them, Additionally, if you may be applying for Medicaid, many states require that you show five year’s worth of bank statements.

We understand, you’re drowning in documents. Clutter not only takes up space on your desk, it clouds your mind. So, why keep them? Bank statements are important to hold on to for a limited amount of time in case there are any inconsistencies, miscalculations or other suspicious activities. Keeping these documents is in the best interest of your personal and financial safety.

But, you say, you can access these bank statements any time through your online accounts. While that may be true, do you really want to track all that down? Also, not all banks offer back statements in perpetuity.

When you do get around to tossing your statements, fire up the shredder and compile the myriad of documents you’ve accrued over the year. While preparing for the following year, it’s a good idea to consider buying a fireproof safe for your home in which to store these important documents. Sure, bank safe deposit boxes can be useful, but you’ll need to remember that they are only accessible during branch operation hours.

Keeping a year’s worth of bank statements may seem like a hassle. But in the grand scheme of things, having proper documentation and proof on your side in case you suddenly need it, can make storing 12 months of records a trivial detail. In the end, it’s always better to be safe than sorry.


About Caldwell Trust Company

Caldwell Trust Company is an independent trust company with offices in Venice and Sarasota, Florida. Established in 1993, the firm currently manages over $850 million in assets for clients throughout the United States. The company offers a full range of fiduciary services to individuals, including services as trustee, custodian, investment adviser, financial manager and personal representative. Additionally, Caldwell manages 401(k) and 403(b) qualified retirement plans for employers.


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