The bank statements can typically summarize your financial activity in a single location. These helpful financial tools could arrive in the mail, your email inbox, or your online banking service. If you have a checking account or savings account with a financial institution, the institution where you have such accounts will most likely send you a monthly bank statement. Since they are very useful, this article describes all the information you need to know.
List of Contents
- What Exactly Is a Bank Statement?
- The Purposes of a Bank Statement
- The Features of a Bank Statement
- How to Read a Bank Statement
- Getting a Bank Statement
- How to Find and Correct Mistakes on Your Bank Statement
- The Differences between Paper and Online Bank Statements
- How to Reconcile Your Bank Statement
- How Often Should You Check Your Bank Statement?
- Conclusion
- FAQs
What Exactly Is a Bank Statement?
Typically, monthly bank statements or account statements are documents sent by banks to account holders. It provides a summary of account transactions for the time covered by the statement, including deposits, transfers, and withdrawals. There is relevant account information on bank statements such as beginning and ending amounts and bank contact information. Traditional financial institutions, internet institutions, and credit unions send bank statements.
In addition, banks issue statements for their records and to facilitate account reconciliation. Therefore, they are an excellent tool for tracking expenditures and expenses. Notably, checking your monthly bank statement might help you identify areas where you can reduce or eliminate spending. Finally, it resulted in savings.
The Purposes of a Bank Statement
Each month, banks utilize bank statements to document the transactions of account holders. Statements detail all monthly transactions, including deposits, withdrawals, and other costs. However, an individual’s bank statement serves multiple purposes. It can provide insight into spending habits and help identify fraudulent transactions requiring action.
The Features of a Bank Statement
Account holders can find a wealth of information on their bank statements. The information displayed on a financial institution’s statement varies, but often includes the following.
- The personal information
- The financial institution’s information
- Statement period dates
- Balance details
- Transaction details
- Interest earned
- Check deposits
- Direct deposits
- Electronic transfers
- Canceled checks
- Reimbursements
- Credits
- Debit card purchases and payments
- ATM withdrawals
- Bill payments
- Bank fees
- Interest earned
- Fees charged
The transaction date and payer or payee will be displayed with each component on the statement. If you detect mistakes on your statement, you may find contact information for customer support and instructions on how to proceed with your statement.
How to Read a Bank Statement
There is nothing hard about bank statements, but they contain a tremendous amount of information that can sometimes be confusing. Although certain information may differ from bank to bank, most of them contain the following.
- Bank information
Your bank’s contact information, such as their phone number and mailing address, should be included on your statement. This includes your information.
- Personal information
The statement contains both your name and your contact details inappropriate places.
- Statement period dates
When generating statements, some financial institutions use the first and last days of the month, whereas others begin and end on particular days.
- Starting and ending balances
Financial organizations include balances. Thus, consumers may see where they started and any progress or mistakes they have made during the month.
- Transactions
Deposits, cheques, direct deposits, ATM withdrawals, ACH transfers, and pending transactions are examples of this.
- Fees
It would appear on your monthly bill if you were charged a price for any banking service.
- Interest earned
If you have an account that earns interest, your statement will detail any interest that was accrued during the time covered by the statement.
If you have many accounts at a single financial institution, such as various savings accounts or checking accounts, they will often appear on one statement per billing cycle.
Getting a Bank Statement
Most financial institutions deliver bank statements to their customers at the end of each statement period via postal mail, electronic mail, or directly through their online accounts. If you have done at least one electronic funds transfer within the statement period, your financial institution is required to issue you a statement.
Transactions conducted via a debit card or an ATM, direct deposits, online bill payments, and recurring payments made from your account are all examples of electronic funds transfers.
Certain banks charge a nominal cost for paper statements. However, you have the choice to turn out of receiving print statements and receive fee-free online paperless statements instead (e-statement). In most cases, the preferences section of your online account will allow you to make this selection. You can check with your financial institution or credit union to see what choices are available to you.
How to Find and Correct Mistakes on Your Bank Statement
Genuinely, discovering an error infrequently occurs. It may be an incredibly irritating experience. However, you can contact your financial institution immediately if you discover an error.
The following is a list of the procedures that need to be taken to rectify inaccuracies.
1. Verify the Mistake
If you come across an error, you should check that it really is an error before moving forward. It will be necessary for you to present it when you talk to your bank.
2. Contact Your Bank
You should call your financial institution to let them know about the mistake. Moreover, you should give them evidence that it occurred. You might be able to accomplish this by contacting the customer care department, sending a message through your online bank account, or sending an email. If you are calling your bank, you should inform them that you have evidence of the problem and ask how you may communicate it to them effectively.
3. Consult with the Third Party
If the mistake regards another party, you should take the time to notify them of the problem in case it affects their records. They might be able to help you solve the problem faster than you can.
4. Update Your Records
Once the problem has been repaired, you have to make the required changes to your records. Moreover, you should keep records of your correspondence with your bank or a third party in case problems emerge later. Additionally, you should keep track of who you talk with and the date and time.
The Differences between Paper and Online Bank Statements
Typically, the mail is the delivery method for paper bank statements. However, most financial institutions like banks and credit unions now give their customers the option to get paperless electronic statements through their online banking platform. Thus, customers are provided the ability to view, download, and print a copy of their statements from any location with internet access. Several financial institutions use email to deliver monthly statements to customers.
Nevertheless, whether you receive a hard copy or an electronic copy of your statement, all versions contain the same information in the same manner. As long as all options are made available by your financial institution, you should select which one to choose is entirely up to you. You might decide to get your bank statement online for a few different reasons as the following.
- Sustainability
Your bank statement may be several pages long. Thus, consumers who choose to get them online can help the environment by reducing the amount of paper. In addition, banks will often keep online statements for several years, making them available at any time to customers.
- Privacy
Online bank statements are typically more secure than conventional. Receiving a paper statement may put your personal information in danger. The majority of banks and credit unions employ extensive internet security procedures to safeguard your accounts and personal data.
How to Reconcile Your Bank Statement
The objective of reconciling your bank statement is varied. First, it ensures the accuracy of financial transactions by facilitating their verification. It allows you to verify that you have not missed a payment or paid someone twice. Moreover, you may trace any cheques from the previous month that were not cashed. In addition, reconciling your statement provides insight into your finances and spending habits. This can lead to improved financial management. The ending balance on your statement should correspond to your monthly records. To reconcile them, you must do the following.
- Compare to your records
This can be performed with a written journal and receipts, budgeting software, or an application.
- Verify the balance
You should verify that the beginning balance on your bank statement corresponds to your records. If it is not, you should determine why and resolve the issue.
- Check deposits
You have to check the reported deposits on your bank statement to check they correspond with your records.
- Check withdrawals
You also have to check your withdrawals in the same manner as your deposits.
How Often Should You Check Your Bank Statement?
If you are going to use your bank statement to reconcile your accounts, you need to be sure to review it after each statement month. If this is the case, you are free to check it whenever you like. If you check your bank statement frequently, you may be able to discover errors that will cost you money or recognize patterns in your spending.
Conclusion
To summarize, understanding more about where your money has arrived and where it has gone can be facilitated. It can become proficient in reading and utilizing your bank statement. Significantly, it can also assist you in keeping your account in order and preventing you from making costly spending errors.
FAQs
A bank statement is a document provided by a financial institution that details the transactions that happened in a certain bank account during a given time period, regularly one month.
At least once every month, you should verify your bank statement to ensure that all transactions are accurate and there are no illegal charges or errors.
To avoid fraud, you should save your bank statement in a secure location, such as a locked file cabinet or safe. You should also avoid sharing your account credentials with others and constantly check your account for any fraudulent activity.
Related Articles:
Read more: Banking
Source: Forbes