Your Complete Guide: How Long Should I Keep Bills and Bank Statements?

Managing financial paperwork doesn’t have to be complicated. The key is knowing exactly how long you should keep bills and bank statements, then organizing them smartly. Let’s break down what you actually need to hold onto and what can safely go.

The Right Way to Store Financial Documents

Before diving into timelines, let’s talk storage. How you keep your records matters just as much as how long you keep them.

Digital Storage: The Modern Approach

Scanning documents and storing them on an external hard drive gives you flexibility. You can access files from anywhere, protect them with passwords, and reduce physical clutter. Many people find this method combines convenience with security.

Physical Storage: The Safety Net

Some prefer hard copies in fireproof safes or lockboxes. This eliminates dependence on technology. For truly important items—birth certificates, insurance policies, wills—a safe deposit box at your bank is ideal.

Cloud-Based Solutions

Cloud storage offers accessibility but requires trust in the provider’s security measures. Reputable services use encryption and firewalls, though server outages remain a risk.

How Long Should You Keep Bank Statements and Related Records?

The retention period depends on the document type and its purpose.

Standard Bank and Credit Card Statements

Keep statements from all accounts for at least one year. If you’ve gone paperless, most banks let you download copies from their website. Federal law requires banks to maintain records for five years, so you can request older statements if needed.

For Tax Purposes: The 7-Year Rule

This is critical. The IRS can audit you for three to seven years after you file. Keep your tax return and all supporting documentation—including bank statements—for at least seven years. Supporting records include:

• W-2 and 1099 forms
• Brokerage statements
• Tuition payment receipts
• Charitable donation records
• Medical expense documentation
• Home office utility bills (if claiming deductions)

Canceled Checks

Hold onto canceled checks for one year for reconciliation purposes. Beyond that, you can discard them unless they relate to tax deductions. Your bank can provide copies for up to five years if needed later.

Bills and Utility Records

Most bills can be discarded after one month once paid. The exception is bills supporting tax deductions—such as home office utilities or medical expenses—which should be kept for three years minimum.

Protecting Your Information When Discarding

Never throw away financial documents in the trash. Identity thieves actively search for discarded statements containing personal information. Instead, always shred bills, bank statements, old credit cards, and similar documents before disposal.

Creating Your Personal System

The ideal approach combines multiple storage methods. For example: scan important documents and save them to an encrypted external drive, keep original copies in a fireproof safe for seven years, and maintain current bills in an accessible file folder.

Your system should answer two questions: Can you find documents when you need them? Are they protected from unauthorized access?

Knowing how long you should keep bills and bank statements—and implementing proper storage—keeps your finances organized and secure. Review your system annually and adjust based on new IRS guidelines or life changes.