What is a Bank Statement? | CapWay
- A bank statement, also known as an account statement, is a record that summarizes all of a bank account's transactions during a set period, typically monthly.
- A bank statement will show you the deposits and withdrawals within your account over the previous month.
- Tracking the activity in your checking and savings accounts is a great money management strategy.
A bank statement, also known as an account statement, is a record that summarizes all of a bank account's transactions during a set period, typically monthly. Account information is found on bank statements, including account numbers and a thorough list of deposits and withdrawals.
Account holders can examine all account activity on their bank statements, including checking their account balance, finding errors, and potentially spotting fraud. Additionally, reviewing your bank statements can help you budget better, save money, and keep track of expenditures.
More banks are becoming more eco-friendly, which means they are ditching printing out and mailing bank statements. Banks that are “going green” would prefer the account holders to view the statement online. If you want to receive a printed copy of your statement, your bank may charge you a small fee.
How often should I receive my bank statement?
Bank statements are typically sent to the account holder each month directly from the bank, either online or by mail. Generally, you can also check your bank statement via your bank's mobile app.
What will I need my bank statements for?
During tax season, bank statements help prove your income and the expenses you paid for throughout the year.
Applying for a Loan
When applying for a small business loan, you must provide your bank statements to the lender. Also, your bank statements are needed if you want to buy a house and plan to apply for a mortgage loan.
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How Bank Statements Work
A bank statement will show you your account activity over the previous month, including your spending habits and any expenses incurred.
Most bank statements begin by compiling all deposits, giving you a clear picture of what was deposited into your account during the previous month. Your withdrawal activity will then be compiled for you to review. Your account balance at the start of the month will be included in your summary, followed by your account balance at the end of the month once all deposits and withdrawals have been tallied.
The bank statement will continue to list your transactions below the summary, with dates, sums, and payees. Depending on how frequently you use your checking account to pay for expenses, a bank statement may span several pages. You typically see transactions as they occur. You can see when money enters and leaves your account each month by looking at the comprehensive list of transactions.
The deposit's origin and the expense's destination are also included in your transaction details. Therefore, to ensure the transactions are accurate, it’s important to review them and pay close attention to the expenses.
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How Do I Obtain My Bank Statement?
Many banks encourage account holders to "go paperless" and receive their statements electronically. Some banks notify customers via email when their statements are ready to view online. The customer accesses their online banking account on their financial institution's website. Electronic statements contain the same information as paper statements.
Banking with CapWay
For example, as a Money Account Holder with CapWay, you can see your transactions when you log into the app. Your account activity will show both pending and cleared transactions. You can also opt-in to receive notifications when there is a deposit or withdrawal. By opting in to receive notifications, you can stay on top of the financial activity within your account.
Six Items to Look For on a Bank Statement
Although it’s not common, banks can make mistakes too. So reviewing your monthly bank statement is critical. The bank statement should contain details on resolving disputes with your financial institution. If there are any discrepancies in the numbers on your statement, contact your bank immediately so that they can help you resolve them.
Below are six items you should look for on your bank statement.
Errors or Fraudulent Activity
Balancing a checkbook has become outdated, and keeping receipts are a thing of the past as well. Since we are in an era where almost everything can be done online or at your fingertips, you must examine your bank statement for incorrect charges or transactions. If you spot an error, you should call your bank immediately to resolve the matter.
Account holders should double-check payment amounts if bills are automatically deducted from their accounts. This way, you can see what you are paying for and what you need to stop paying for, like a subscription you rarely use.
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Account holders with monthly deposits should ensure they appear on their bank statements.
Any amount automatically withdrawn or taken from the ATM should be updated on your bank statement and account immediately.
You should always make sure your current balance is correct. Depending on how many accounts you have, such as a checking and savings account, your total balance for all your accounts should show up on the bank statement summary.
When trying to get your spending on track, a bank statement provides an overall financial picture of your spending habits and patterns. This is helpful because you can track where your money is being spent and how to save better or budget it. You can also categorize your earnings and expenses.
Account holders with an interest-bearing account will accrue interest based on the bank's set period, typically on a monthly basis. The interest paid to the customer will be displayed on the bank statement.
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How Long Do Banks Keep Your Statements?
Banks must keep statements for up to five years under the Bank Security Act, though some may keep them for longer. So even if you close your account, the bank will retain your records for at least five years.
Why would you require an old bank statement?
You may need to retrieve your records for a tax audit, litigation, divorce, or loan application.
Bank statements from the previous year or two are frequently available online for free. However, if you need to go back further than what is available online, your bank may charge you a fee to receive each bank account statement.
The Money Wrap-Up
A monthly bank statement is an important document that helps account holders keep track of their finances. The bank statement is also a significant factor in assisting account holders in detecting fraudulent activity or bank errors. In addition, a bank statement is a valuable tool for budget planning because it shows your account activity, such as deposits and withdrawals.
Checking your bank statement frequently helps assist you in budgeting and planning better. However, be very cautious when checking your bank account statements using a public wi-fi network. Many technology hackers can easily access your private banking information when you are connected to the same network as them.