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How Long Should You Keep your Checks

How long do I need to keep canceled checks and bank statements?

The old rule of thumb was to keep them for seven years and that was tied to IRS retention rules and proof of payment. Retention is easier in today's electronic banking environment. Many banks provide electronic statements and imaged checks. This makes retention easier because they take less space. If you have e-statements, be sure to back them up. Don't just leave them on a hard drive, and be sure to encrypt and/or password protect them.

You don't necessarily need to save all items. Many checks could be retained because you want proof of payment for a debt. On your next statement for that debt, if you see the prior month's payment you don't need to keep that check any longer. If it is a tax deduction, you may want to still keep it seven years. Some people like to make a simple rule and they retain checks, all of them, for a year. When they get to month thirteen, they shred the oldest.

Remember too, that your bank retains items for a period of time. This can vary by bank, by state, but just because you don't have that copy, doesn't mean there isn't one.

Published on 1/23/07