Bank Document Retention Policy

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Banks go through a tremendous amount of paperwork on a yearly, monthly and daily basis. Despite the sheer amount of paper, the bank cannot simply shred the documents once a customer closes his accounts. The bank must have a policy for retention of these documents. This way, if the customer comes back or if the bank needs to revisit the documents for legal reasons, the documents still exist. Retention policies vary by institution based on the type of document.

Account Documents

Keep standard account documents such as statements, reconciliations, purchase orders and vouchers for a maximum of seven years. Deposit slips, on the other hand, only need to be kept for a maximum of three years. Cancelled checks are slightly more important. Hold these up to 10 years. Retain vital financial data about the bank and its accounts, such as general ledgers, trial balances, profit & loss statements and balance sheets, permanently. If you have any doubt as to the importance of a document to the bank’s operation, err on the side of caution and retain it.

Loan Documents

Borrowers, auditors or lawyers can request information on closed loans long after the payoff dates. Keep these records for at least seven years. It is not uncommon for customers to revisit loans or for courts to subpoena loan documents several years after the obligation is paid. Destroying this information too soon may seem like a red flag to the prosecutors. Loan applications or requests that are withdrawn or denied prior to settlement do not need to be retained for as long a period of time. Keep these documents for no more than two years.

Human Resources

Retain most human resources documents for at least seven years. This includes medical benefits, disability benefits and attendance records. Maintain performance records and personnel files as long as employees are with the company. Once an employee is no longer with the company, hold his records for at least seven years after termination. Hold applications for individuals who did not get hired for a period of two to three years.

Legal

Corporate records and legal documents are the most important files to any business, not just a bank. As such, keep these records permanently. This includes contracts, mortgages, deeds, leases, licenses, legal correspondence and litigation claims. These documents can be referenced or called into question for years. Because of this importance, you should make the effort to retain them indefinitely.

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