Do I need to Keep Bank Statements now that Everything is Online?
It may seem that everything we do online now leaves some form of footprint, and nowhere is that more pertinent than our personal finances.
With so many of our transactions happening online and the overwhelming number of people now accessing their bank accounts online, there appears to be little need for us to wait until the monthly statement pops through our letterbox to see what state our finances are in.
Internet banking not only allows us to check on our balance, but also to search through transactions and statements over a period of months.
However, that does not mean we can get the shredder out just yet and confine all those paper statements to the bin.
There are a number of things to consider when we decide whether to hold onto old paper bank statements, particularly in the digital age.
How far back can I Access Bank Statements through Internet Banking?
Many banks will allow you to search through statements between 6 and 12 months back. This is often because lenders will insist on seeing your activity over that period to assess whether you are suitable for a mortgage. However, if you need historic statements from longer than 12 months ago, you will have to contact your bank directly and ask for them to be sent to you, this would usually result in an extra charge.
Why do I need to Keep Old Bank Statements?
If you are self-employed, it is a good idea to keep old bank statements in order to calculate how much tax you will have to pay. Even for those who have tax and national insurance paid by their employer, keeping bank statements is a good idea for a number of reasons. They may come in handy if you feel that you are due a tax refund or if you have done some freelance work and need to work out expenses before calculating how much tax you need to pay.
This recent spate of compensation claims for mis-sold PPI and other forms insurance in the UK mean it is important to have a comprehensive record of your finances stretching back as far as is possible.
Bank statements are also important for budgeting purposes. Many of us may budget from month to month to assess our outgoings and income, but with statements which go back further than that, we can get a better overview of the state of our finances from year to year.
Keeping old bank statements is also a useful way to guard against fraud. It can help protect from identity fraud and will also help you recognise any suspicious activity on your debit card, alerting you to potential fraud there.
Should I Keep Hard Copies or Electronic Statements?
Paper copies, if filed correctly, can be much easier to put your hand on when you need them, but if filing space is an issue, then you should consider storing them electronically. Your bank may only allow you to access online statements from up to a year ago, but if you save electronic statements as you get them on a USB drive, then you can store lots of bank statements without having to worry about space.