Consistently reviewing bank statements can become a critical asset to your financial health. A bank statement is a very important financial summary of all monetary transactions that occurred during the previous month. Let’s learn how to understand them with the goal of securing your financial livelihood.
What is Displayed on a Bank Statement?
Each bank statement that you receive – either in print or in digital form – provides a snapshot of the account’s transactions over the course of a month. These contain the account information associated with either the checking account or savings account for which the statement represents. It also provides a detailed list of both the deposits on the account and the withdrawals that were made on the account.
Additionally, a bank statement displays the beginning and ending balance of the account for the designated period of time, deposits, charges, and any interest that has been earned during the set time period. Once provided free of charge, if an individual receives a paper statement in the mail, they may now be charged a fee. The national average for this fee is around $3.00 per statement mailed. In most instances, a bank will provide a digital statement free of charge.
How Does a Statement from the Bank Work?
A bank statement outlines all transactions that occurred within a set time period – usually a month – in chronological order. In most cases, a statement is sent on a month-by-month basis; however, there are instances where a bank will send a statement on a quarterly basis. These financial institutions are not required to send a statement, but most do if at least once activity or electronic fund transfer occurred within the month. You will find the following on your statement:
- ATM Transactions
- Debit Card Transactions
- Direct Deposits
- Payments Utilizing Online Bill Pay
- Recurring Automatic Payments
The Bank Statement Types
As mentioned previously, there are typically two types of bank statements. These are paper statements and electronic/digital statements. Below is a brief explanation of each:
- Paper Statement – Paper statements are those that have been printed and mailed to a recipient. In today’s world, these include an average cost of $3.00 per statement. That covers the supplies it takes to print the document, the postage and other items required to mail the statement through the USPS, and any labor fees. In years passed, these were often free because there was no alternative. This is no longer the case; however, certain people may be able to have this fee waived. For example, those over the age of 65.
- Electronic Statement – The electronic statement may be referred to as a “digital statement”. This is – just as the name indicates – a statement that is sent online or accessed online for downloading or for printing. In most instances, it is free to receive an electronic statement. You may keep a copy stored on an electronic device or you may choose to download the statement from the receiving email and then print out a hard copy. The choice is yours.
What All Does a Bank Statement Entail?
The bank statement contains a lot of information for an account holder. This includes the following:
- Bank Address & Contact Information
- Information Regarding Account
- The Date of the Statement
- The Beginning & End Dates of the Statement Period
- The Beginning & End of Account Balance
In addition to the standard information, there are details pertaining to each transaction that was made on the bank statement. These include the following:
- Checks Received
- Checks Paid
- Service Charge
- Annual Percentage Yield (APY)
- Interest Earnings
What’s the Purpose of a Bank Statement?
A bank statement is a record of your transactions each month. These include every single type of transaction that is made over the course of a month. These may help provide you with a high level of insight into your spending habits. The statement may also help you identify transactions that are unauthorized and that require your immediate action. Many financial institutes – such as lending companies – may require bank statements in order to determine if a person is capable of repaying a loan or to verify their income.
How to Sign Up for an Electronic Statement
In order to eliminate having to pay a fee each month for a paper statement, you should sign up for an electronic statement. To sign up, perform the following steps:
- Log into your bank through their website or through their app.
- Go to “Statements”.
- If you are unable to find “Statements”, you may have to look under “Services” or “Account”. It may also be listed as “E-Statements”.
- Select the account that you have an interest in reviewing and making changes to – if you have more than one account.
- Choose to sign up for the digital statement.
- Once you get a notification that your digital statement has arrived, go through the same steps until you get to “Statements”. Here, you will be able to view, download, and print any digital statements stored for your records.
How to Reconcile Bank Statements
Reconciling bank statements is a way to review your spending and provides valuable insight into your spending habits. This can aid in helping you manage your money effectively. In short, you want to be certain that the ending balance that is listed on your statement matches that of the monthly records that you have kept. To do reconciling, do the following:
- Review any records you have with written notes, your receipts, and/or budgeting app or software and compare it with the information within your bank statement.
- Check the balance on your statement and in your personal records to ensure that they match. If you do not receive a match, figure out why.
- Make sure all the deposits and withdrawals on your bank statement match your information.
- Engage in reconciling by fixing any issue that does not add up by working to correct the information in your records or by consulting with the bank on errors that occurred on their side.
How to Handle Mistakes
If you find that there is an error on your bank statement, you may do the following:
- Verify the mistake that you have discovered and any supporting evidence.
- Contact your bank and give them the proof associated with the mistake.
- If the issue has occurred with a third party, contact them for resolution.
- Once a resolution has occurred, store any records associated with the issue in case another problem develops in the future.
Join Us Today
Keeping track of bank statements and reviewing them on a regular basis is an important aspect of your financial livelihood. If you fail to do this, an issue could occur that could cost you a lot of time, money, and effort to resolve. If you are looking for a banking partner that will help you ensure that your banking is productive and not at risk for complications, contact us here at Somerville Bank today.
We have various types of accounts and services that you may enjoy having available to you. We also employ financial advisors and specialists that may assist you with all of your financial needs. If you would like to learn more or would like to talk to a specialist, contact us at one of our many locations today.