Thursday, 19 September 2019

Understanding a Bank Statement

Understanding a Bank Statement
27 Jan
4:19
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A bank statement is report that a bank or credit union sends out on a fixed date each month or quarter listing account activity from the previous statement period. That includes activities like deposits, withdrawals, interest paid, checks and any charges or fees. A bank statement will also show you your account balance at the time the statement period ended.

A bank statement is a great way to see if there are any inaccuracies in your account. You can also use it to track your finances, such as seeing whether your spending habits are on target.

The 7 key parts of your bank statement

Depending on your bank or credit union, your statement typically includes transaction details and account summary. It may also include how to report inaccurate information. For those who have multiple accounts (including both checking and savings accounts) with the same financial institution, your transactions may be lumped into one statement.

Here’s a sample:

Example of a bank statement

Example of a bank statement

Bank statement usually displays the following information:

  • Bank information. You should see the name of your financial institution at the top, which can also include their contact details like their address and phone number.
  • Statement period. This is the period of time that’s covered by your statement.
  • Account information. This is where you’ll be able to see which account your statement is for, with the account type and number.
  • Account summary/rewards information. If your account offers rewards, such as cash back or points, you may see it listed in a separate section. Your statement could also list a summary of the types of transactions, giving you a total dollar amount for each one.
  • Account balance. You’ll be able to see your start account balance (at the beginning of the statement period) and your ending account balance (the last date of the statement period).
  • Account description. Your statement will list in order transactions that occurred. It’ll also include the amount withdrawn or deposited and brief description which can include the type of transaction and merchant information.
  • Fees. If you incurred any maintenance, overdraft or returned items fees, you may be able to see a summary of those transactions, including ones for the current statement and year to date.

Paper vs. paperless statements

Financial institutions typically give you the option to receive paper or electronic statements. If you’d rather receive paperless statements, you can ask your bank or credit union on how to change your account options.

In many cases, you can simply log into your checking or savings account online and do so in the account settings section. You may also be able to indicate how you want to receive your statements — via email or your bank will send you an alert so you can download whenever you log into your account. Most places will allow you to download a PDF copy of your statement so you can keep it in your files or print them out.

The advantage of going paperless is that it’ll save you from unnecessary clutter. It could also save you money — some banks and credit unions tack on a small fee if you opt to receive paper statements.

However, keeping paper statements also has its advantages. For one, if you don’t have regular access to a computer, having paper statements on file can come in handy. Or if you’re the type who gets overwhelmed by their inbox, getting paper statements can eliminate that and ensure you check your statements each month.

Also, if you’re managing finances for someone else, like an older member of your family, having paper statements can be less of a hassle than electronic statements since to access those documents, you’ll need to find online logins.

How long to keep your bank statements

Unlike tax documents, you don’t need to hold onto your bank statements for years. The general rule of thumb is that you should hold onto bank statements for a year. Of course, it depends on why you need those documents, such as for tax purposes or you’re using it to check your transactions.

Most banks will allow you to access up to a few years’ worth of statements, though check with yours to see what their policy is.

To get rid of paper statements, the safest way to do so is to shred them. Doing so can help prevent the risk of fraud or identity theft if you were to just throw away your pile of sensitive documents. You can either purchase one or go to your nearest office supply store where they can shred and dispose of them.

What to watch out for

With bank statements, make sure you store them in a safe place if you have paper statements or don’t log on to retrieve electronic copies over an open Wi-Fi connection. Doing so can put you at risk of someone stealing your personal information and using it to their advantage. When you review your bank statement, see if all the information is correct. If you have questions or want to report fraudulent activity, contact customer service as soon as possible.

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Sarah Li Cain
Sarah Li Cain |

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here

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Source: https://www.magnifymoney.com/blog/banking/bank-statement/

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