A bank statement encapsulates all your account’s transactions over a designated period, typically on a monthly basis, and is sent to you by your financial institution in paper or digital forms. These statements provide comprehensive details such as account numbers and a chronological list of deposits and withdrawals.
Key Insights
- Comprehensive Record: A bank statement includes a list of all transactions for a specified period, usually monthly. This comprises deposits, charges, and withdrawals, along with the beginning and ending balances and any interest earned during that time.
- Expense Monitoring: By reviewing these statements, account holders can effectively track their expenses, keep tabs on spendings, and catch any fraudulent charges or discrepancies.
- Cost of Paper Statements: While electronic statements are mostly free, traditional paper statements usually entail a nominal fee, which accumulates over time.
How a Bank Statement Functions
Financial institutions issue bank statements to account holders, showcasing detailed account activity. These statements facilitate the review of all transactions, typically in the order they occurred.
Most banks dispatch these statements on a monthly or quarterly basis. However, they aren’t obligated to send a monthly statement unless there’s been at least one electronic fund transfer in that period. Transactions falling into this category include:
- ATM and debit card transactions
- Online bill payments
- Direct deposits
- Recurring automatic deductions
Banks can modify the bank account statement cycle date at any given time. Moreover, banks are mandated to retain records of deposits exceeding $100 for at least five years.
Varieties of Bank Statements
Many financial institutions offer the flexibility of receiving either paper or digital statements, typically via email.
Digital Bank Statements
Digital or e-statements allow account holders to receive and access statements online for easy download or printing. Even with these conveniences, some still prefer printing out statements to maintain a permanent record.
Several banks email statements directly to customers as attachments, and ATMs might be able to print a summarized version of a statement called a transaction history. Opting for digital statements can often waive account maintenance fees and is generally free of charge.
Paper Bank Statements
Despite the advent of digital records, paper statements persist in popularity. However, these come with associated fees due to the costs of printing and mailing.
Typically, banks levy a few dollars per paper statement. This fee might be waived for older adults or minors, varying by institution.
The Advantages of Bank Statements
Bank statements serve as invaluable tools for monitoring finances, spotting errors, and understanding spending patterns. It is advisable to review bank accounts regularly, be it daily, weekly, or monthly, to ensure the records align and to catch potential overdraft fees, errors, or unauthorized activity promptly.
Inconsistencies should be reported quickly, usually within 30 days, though this can vary by account type and state regulations. Maintaining these statements for at least a year is recommended.
Essentials of a Bank Statement
Bank statements contain crucial information including:
- The bank’s address and contact
- Account information and the statement’s duration (beginning and ending dates)
- Opening and closing balances
- Detailed transaction records (amounts, dates, payees, deposits, withdrawals, checks, fees, and interest earned)
For example, from September 1 through 30, a statement could detail:
- Beginning balance: $1,050
- Total deposits: $3,000
- Total withdrawals: $1,950
- Service charges: $0
- Ending balance: $2,100
What Constitutes an Official Bank Statement?
An official bank statement, dispatched monthly by your bank, contains comprehensive transaction details like account numbers, deposits, and withdrawals.
How to Obtain a Bank Statement
Bank statements can usually be accessed via your financial institution’s website. Alternatively, you can request a paper statement to be mailed to you.
Bank Statement vs. Transaction History
A transaction history provides a summary of all transactions over a specified period, whereas a bank statement typically covers one month and may not include recent or pending transactions.
Privacy Concerns
Your bank statement is private and cannot be accessed by third parties without your permission. Lenders can verify your bank statements with your consent.
Conclusion
Bank statements are crucial for verifying that your transactions align with your records. They can help you identify unwanted subscriptions, double charges, and discrepancies while helping assess the interest earned on accounts to consider switching to higher-yield options. However, bear in mind the potential fees for paper statements that could accumulate annually.
Related Terms: Savings account, Checking account, Account statement, Bank transactions, Financial statements.
References
- Consumer Financial Protection Bureau. “Does My Bank/Credit Union Have to Send Me a Monthly Statement for My Checking Account?”
- Helpwithmybank.gov. “Can My Bank Change My Deposit Account Statement Cycle Date?”
- HelpWithMyBank.gov. “How Long Must Banks Keep Deposit Account Records?”
- Helpwithmybank.gov. “There Are Several Forged Checks, All From the Same Person, Against My Account. The Bank Claims That Because More Than 60 Days Have Elapsed, It Doesn’t Have to Do Anything. Is This True?”
- Consumer Financial Protection Bureau. “Interactive Bureau Regulations/12 CFR Part 1030 (Regulation DD)”.
