What Is a Bank Statement?
A bank statement is a document prepared monthly by your financial institution. With a bank statement, you can see all the income and expenses related to the account.
Understanding your bank statement can help you learn more about your financial habits and make better financial decisions. Let's take a look at what goes into a bank statement and how it can provide a detailed picture of your finances.
What is a bank statement?
Your bank statement details all the transactions made with your account in a month. By looking at your bank statement, you can see all the money that came in and out of your account in one place. For each transaction, dates and other parts are also displayed.
This way, you can see who paid (or who paid) and the date the bank actually authorized the transaction. With this information, you can manage your savings and make better financial decisions.
A typical bank statement includes the following information:
Personally identifiable information, such as your bank account number, name, and address.
The period covered by your bank statement, which generally covers one month. However, returns do not always start at the beginning of the month. For example, your statement may run from the 13th to the 12th of the following month.
Banking information, including customer service number and instructions for reporting fraud and errors.
The balance for the beginning and end of the statement period
All deposits to your account, including direct deposits, checks, transfers, refunds, payments, and accrued interest.
All withdrawals from your account, including purchases, transfers, ATM withdrawals, automatic payments, and bank fees
How does a bank statement work?
A bank statement is designed to show you exactly what happened to your account in the last month, detailing your spending habits and any expenses you have incurred.
Most bank statements start by grouping all of your deposits together, giving you an exact idea of what went into your account during the last month. You will then see your activity summarized.
Your summary will include your account balance at the beginning of the month and then show your ending account balance after all deposits have been added and withdrawals have been made.
Below the summary, the bank statement will continue to show each individual transaction you made, along with the corresponding dates, amounts, and payees.
With a checking account, a bank statement can have multiple pages, depending on how often you use your account to cover expenses.
Generally, you will see your transactions in the order in which they occurred. The detailed transaction list will give you an idea of when money goes into your account each month and when money goes out.
The transaction details also include information about the source of the deposit and where the expenses went. Carefully review transactions, especially expenses, to make sure they are correct.
How long should I keep my bank statements?
In some cases, such as applying for a loan or filing for a divorce, you may need to refer to your bank statements from previous years. Banks are required by law to keep records of your bank statements for at least five years, and you should be able to access them within that time, even if your account is closed.
Depending on the bank, you may have to pay a fee. fee for accessing statements older than one or two years.
If you need to save old statements, you can download them to your computer and store them in an encrypted folder or save paper copies. In general, when you no longer need a bank statement, you should destroy the paper copies and remove the electronic copies.
Paper bank statements vs. electronic bank statements
Most banks allow you to choose how you want to receive your bank statements. You can receive a paper statement in the mail or you can send an electronic statement to your account.
To access your electronic bank statements, you generally need to log into your account and look for a navigation item that lists your bank statements. It can be in a title like "Services" or "Account Information" if a statement option is not immediately visible in your navigation.
Once you have located your statements, you can choose the month you want to view. You can usually save your statement as a PDF on your computer or print it out.
We hope you enjoy watching this video about what is a bank statement
Source: The Audiopedia
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