Wednesday 19th February 2025
What is a Bank Statement?
By Simplyhawk

What is a Bank Statement?

What is a Bank Statement? – A bank statement officially shows account activity spanning a specific period, usually one month. The document contains complete information about every financial transaction within that particular time window to monitor your funds precisely. Account holders need bank statements to monitor their funds and view their spending habits to catch unauthorized transactions and payment errors.

Why is a bank statement important?

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When you get a new statement, reviewing the information carefully is a good idea. Here are a few reasons why:

Reviewing your bank statement provides a straightforward way to monitor your expenditure obligations. You should check that every required monthly payment, such as utility costs and donations, has been made to the bank. You can identify subscription payments in your statement that you no longer wish to pay since you meant to cancel them.

Your bank statement is a strong tool that helps you maintain your monthly budget constraints. You can easily watch your spending habits so you can locate ways to decrease expenses if necessary.

The bank statement provides valuable tools to help detect fraud along with monitoring errors. Check your financial statements with attention to unauthorized transactions and clerical mistakes, including double charges from merchants. Report all questionable transactions directly to your bank as soon as possible.

Your bank statements can help protect you against potential fraud. Monitor your statements and review your transactions regularly. Make sure to report any suspicious transactions to your bank immediately. Stop potential identity theft events or other types of fraud.

Importance of Reviewing Your Bank Statement

Regularly reviewing bank statements helps you maintain control over finances and avoid potential issues. It’s a simple routine that can make a big difference in spotting problems early and staying informed about account activity.

Account Summary

The account summary provides an overview of the account, including the account number and names of all account holders. This section may also explain whether the account has opted into overdraft coverage or other account services.

Balance Summary

The balance summary gives an overview of the account’s current financial position when the statement was generated. It includes:

  • Beginning balance: Total amount of funds in the account at the start of the period
  • Deposits and additions: Total amount of funds deposited into the account during the period
  • Checks and deductions: Total amount of funds withdrawn from the account during the period
  • Ending balance: Total amount of funds in the account at the end of the period
  • Average monthly balance: Average account balance throughout the month

Unlike online and mobile banking dashboards, the balance summary on a bank statement doesn’t reflect pending transactions. It only accounts for transactions the bank has fully processed at the end of the statement period.

What is an e-Statement?

An e-statement is an electronic equivalent of a bank statement. As mentioned above, account holders are given many possibilities to access bank statements. Bank statements can be accessed in print at a physical branch or via the bank’s online banking system/emails. Due to their convenience and storage ease, e-statements are more manageable than print statements.

Importance of Bank Statements

Budgeting and Financial Planning

A bank statement is like a particular statement. It allows account holders to track their finances and plan for future expenditures. Bank statements are also beneficial for planning, enabling account holders to translate how much they spend on different categories.

For example, an account holder can calculate their monthly expenditure on food by adding up individual transactions.

Conclusion

A bank statement reviews a customer’s financial transactions over a particular time. It’s a key tool for financial transparency and security, and it can help people and businesses make informed financial decisions.

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  • February 5, 2025