If you’re new to banking, you might be wondering how to read your bank statement, whether you get it in the mail or online, and grasp every item that is given. It is crucial that you learn how to interpret your bank statement since, as with any other financial topic, information is power and can ultimately result in cost savings for you.
A bank statement, also known as an account statement, is a record that summarizes all of an account’s transactions for a given month and is normally issued by the bank to the account holder each month. Account information, including account numbers and a thorough list of deposits and withdrawals, can be found on bank statements.
How to Read a Bank Statement
An account holder receives a bank statement from the bank that details all of the account’s activity. It enables the account holder to view every transaction that has been completed on their account. On a predetermined date, banks often mail account holders monthly statements. Additionally, transactions are often listed on a statement in chronological order.
Particular Considerations
Many banks give customers the choice of paper statements or paperless, electronic ones that are typically sent via email. An electronic statement, often known as an e-statement, is a version of a bank statement that is available online for account users to download or print.
Some banks send customers’ statements as an attachment in emails. Some bank ATMs give customers the option to print a transaction history, which is a condensed form of a bank statement.
How to Read Your Statement?
You must have a firm grasp of every detail being conveyed to you on your bank statement in order to read it correctly and successfully.
In the image above, the portions of the following bank statement are numbered accordingly. These specifics consist of:
Statement Cycle
The “for period of” or “statement ending” date, which denotes the time period your bank statement covers, is the first significant item to look for in your bank statement.
Bank account information is not regularly updated in bank statements, which are produced on a periodic basis.
For instance, any transactions you completed on April 10th won’t be shown in the bank statement if the bank manager generates it on April 11th and covers the time period from March 9th to April 9th. (You will have to hold off until you get your subsequent bank statement.)
Your Information
The bank statement will also include your name, bank account number (which frequently only shows the final four digits of your account number for security reasons), and current mailing address.
You may confirm the statement is from the right bank account and that it belongs to you by using the information provided. For each account you’ve opened with your bank or credit union, you’ll get a distinct bank statement.
Financial Data
Clear and easy-to-find identifying information about your bank or transactions should be included in your bank statement.
The bank’s name, phone number, website, and other crucial details regarding when and how to contact them for any questions you may have are all included in this information.
Account Activity
Additionally, you may see a thorough summary of each bank transaction that was made using your account.
Your bank statement will list any money that was taken out of your account as “withdrawals” or “debits,” including any payments or withdrawals you approved as well as any purchases you made.
Similar to how you may see deposits as “deposits” or “credits,” you can also see payments made to your bank account and credits as “credits.”
Account Overview
An account summary that gives you a “snapshot” view of your bank account can be seen on your bank statement. This summary can be found at the top of your transactional list. It will show your initial balance, the total of your additions and withdrawals, and then the ultimate balance of your account.
Remember that the closing account balance displayed is the correct balance as of the final day of your statement cycle.
As a result, it might not always be the balance you have on the day that you read your bank statement.
Date of Transaction
As some purchases, such as large payments and credit card transactions, might not have posted on the exact same day that you made the purchase, some transactions on the bank statement might show a little delay (one or two days).
The transaction date, on the other hand, represented the day that the bank actually carried out the transaction.
Credits and Debits
Debits are transactions that remove money from your bank account, whereas credits are transactions that add money to it.
They include of items like check deposits made at a bank branch, an ATM, or online, as well as paycheck deposits made directly into the bank account by your employer.
Paying bills, using your debit card to make purchases, and paying the bank’s overdraft or account fees are all considered debits.
What Sets a Bank Statement Apart from a Transaction History?
In contrast to a bank statement, a transaction history is a record of all transactions made through that bank account over the course of a predetermined time period that you specify. A bank statement typically only includes the previous month’s transactions and may not include recent or pending ones.
The Difference Between Paper and Online Bank Statements
Mail is used to deliver paper bank statements. However, the majority of banks and credit unions now give customers the choice of getting paperless electronic statements through their online banking. Customers can access, download, and print their electronic statements from any location with an internet connection. Some financial organizations email out statements.
The information in your statement is the same whether you receive a paper copy or an electronic copy. The choice you choose depends on your preferences as long as your bank provides both.
You might decide to get your bank statement online for the following reasons:
Sustainability. Multiple pages may be included in bank statements. By opting for an online bank statement, you can reduce the amount of paper and other resources that are utilized to generate and mail customers’ statements. Additionally, bank statements are often kept online for several years and are thus always available.
Privacy. Online bank statements are typically more secure than traditional ones. Your personal information may be in danger if you receive a statement in the mail. To protect your accounts and personal information, the majority of banks and credit unions employ robust internet security procedures.
Conclusion
The condition of one’s account can be ascertained via bank statements. It can be used for a variety of things, including checking one’s account balance right now, keeping track of spending patterns and savings objectives, and assisting with loan application eligibility checks.
A bank statement can be obtained in a variety of methods, however it is strongly encouraged that you contact your financial institution for further details.
