Published: Aug 9, 2022, 1:08pm
Bank statements serve as a snapshot of your financial activity. These valuable financial tools may arrive via mail, email or your online bank account. If you have a checking or savings account, you likely receive a monthly bank statement from your financial institution.
Here’s a closer look at bank statements, how to read them and correct errors.
A bank statement, or account statement, is a document supplied by banks to account holders every month. It summarizes account transactions from the statement period, including deposits, transfers and withdrawals.
Bank statements include pertinent account information, such as starting and ending balances and bank contact information. Traditional banks, online banks and credit unions all send bank statements.
Banks issue statements for their records and to reconcile bank accounts. But they are a great tool to track your spending and expenses. Checking your monthly bank statement can help you find spending areas to cut or trim, leading to savings.
Banks use bank statements to record an account holder’s transactions each month. Statements include every transaction—deposits, withdrawals and other charges made during the month.
For individuals, a bank statement serves several uses. It can provide insight into spending habits or help you discover unauthorized transactions that require action.
Bank statements include a wealth of information for account holders. What’s shown on the statement varies by financial institution, but typically you’ll see the following:
Here’s some of the personal information you can expect to find on your bank statement:
Bank statements include information about different types of transactions, such as:
With each line item on the statement, you’ll see the transaction date and the payer or payee. Your statement may include customer service contact information and actions to take if you find errors on your statement.
Bank statements aren’t complicated, but they contain a great deal of information that can be confusing at times. While some information may vary from bank to bank, most bank statements include the following information:
If you have more than one account at a single bank, such as multiple savings accounts, they’ll generally show up on one statement per cycle from the institution.
Most financial institutions provide bank statements each statement period either by mail, email or through your online account.
Banks and credit unions must send a statement if you’ve made at least one electronic funds transfer during the statement period. Electronic funds transfers include ATM and debit card transactions, online bill payments, direct deposits and recurring payments made from your account.
Some banks charge a small fee for paper statements, but often you have the option to opt out of paper statements and receive a fee-free online paperless statement (e-statement). Typically, you can select your preference within your online account settings. Check with your bank or credit union to see available options.
It may not happen often, but finding a mistake on your bank statement can be frustrating. If you come across an error, work quickly to fix the matter with your bank or credit union.
Here are some steps to take to correct errors on a bank statement.
If you encounter a mistake, take time to verify that it’s truly a mistake. Set aside any evidence of the error if possible. You’ll need it when you reach out to your bank.
Contact your financial institution to inform them of the error and provide proof of the mistake. You may be able to do this by calling the bank’s customer service department, sending a secure message through your online bank account or by email. If contacting your bank by phone, let them know you have evidence of the error and ask them the best way to send it.
If the error involves another party, take time to inform them of the mistake in case it affects records on their end. They may be able to help resolve the error faster than you can.
Once the error is corrected, make the necessary adjustments to your records. It’s a good idea to keep records of your correspondence with your bank or third party if any issues arise later. Keep the names of people you speak with and the date and time.
Paper bank statements are sent by mail. A bank passbook is provided by the bank in their banking kit. The offline bank statement can be recorded in the bank passbook by visiting the bank branch and getting it updated. It consists of all the transaction statements of your account printed on a paper of a passbook. But most banks and credit unions now offer account holders the option of receiving paperless electronic statements through their online bank account. Electronic statements allow customers to access, download and print their statements wherever they have internet access. Some financial institutions send statements via email.
Whether you get a physical or electronic copy of your statement, it’s the same document with the same information. So long as your bank offers both, the option you receive is a matter of personal preference.
There are a couple of reasons you may choose to receive your bank statement online:
Reconciling your bank statement serves several purposes. First, it helps you verify bank transactions, ensuring there are no mistakes. It lets you make sure you didn’t miss a payment or pay someone twice. And you can track any uncashed checks from the previous month.
Reconciling your statement gives you insight into your finances and how you spend your money. This can lead to better money management. The goal is for the ending balance on your statement to match your monthly records.
To reconcile your bank statement:
If you’re using your bank statement to reconcile your accounts, check it every statement period. If not, you can check it as often as you like. Checking your bank statement frequently can help you discover costly errors or spot trends in your spending.
Learning how to read and use your bank statement can give you a deeper understanding of where your money has come from and gone. It can also help you keep your account squared away and avoid costly spending mistakes.
Kevin Payne is a personal finance and travel writer who writes about credit cards, student loans, debt, credit, and family finances. Kevin lives in Cleveland, Ohio with his wife and four kids.
Data/Automation Editor for Forbes Advisor. Mitch has more than a decade of experience as personal finance editor, writer and content strategist. Before joining Forbes Advisor, Mitch worked for several sites, including Bankrate, Investopedia, Interest, PrimeRates and FlexJobs.
