A bank statement is a document provided by a financial institution, such as a bank or credit union, that shows all of the transactions that have taken place in a specific account over a certain period of time. This includes deposits, withdrawals, and any fees or charges that have been applied. The statement typically covers a month, but can also be provided for a shorter or longer period of time, depending on the institution and the account holder’s preferences.
How a bank statement works
A bank statement is generated by the financial institution at regular intervals, usually on a monthly basis. The statement shows all of the transactions that have taken place in the account during that period of time, including deposits, withdrawals, electronic transfers, checks, and any fees or charges that have been applied. These transactions are recorded in chronological order, and the statement shows the account balance at the end of the period.
What information is on a bank statement?
A bank statement typically includes the following information:
- Account number
- Account type (e.g. checking, savings)
- Period covered by the statement
- Opening and closing balance
- List of transactions, including date, description, and amount
- Any fees or charges applied
- Available credit (if the account is a credit account)
- Interest earned (if the account is an interest-bearing account)
How to read a bank statement
Reading a bank statement is relatively straightforward. The statement begins with the account number and type, as well as the period covered by the statement. It then shows the opening and closing balance, and lists all of the transactions that have taken place during the period in chronological order. Each transaction includes the date, a description of the transaction, and the amount. Any fees or charges applied during the period are also listed.
What is a bank statement used for?
A bank statement is primarily used by account holders to keep track of their spending and to ensure that all transactions are accurate. It can also be used to monitor account activity for signs of fraudulent activity. Additionally, bank statements are often required by landlords, employers, and other organizations as proof of income or as a way to verify an individual’s financial stability.
How to get a bank statement
Bank statements can typically be obtained in one of three ways:
- Log in to your online banking account using your financial institution’s website or mobile app.
- Once logged in, locate and click on the “Statements” or “E-Statements” option. This can typically be found under the “Accounts” or “Services” tab.
- Select the statement period you want to view. This can be for the current month or for a previous month.
- Choose the statement you would like to view or download. You can select one or multiple statements at a time.
- If you require a statement that is not available online, contact your financial institution and request to receive it via email.
- Review, print or download your statements as needed. It’s recommended to keep them safe for at least one year.
- Once you have finished, remember to log out of your online banking account for security purposes.
Please note that the steps may vary slightly depending on the financial institution you use, but the general process should be similar. It’s always best to check with your bank for specific instructions if you are unsure.
Paper bank statements vs. electronic bank statements
There are advantages and disadvantages to both paper and electronic bank statements. Electronic statements are typically more convenient and environmentally friendly, as they can be accessed online at any time and do not require physical storage. However, some people may prefer paper statements for the ability to physically review and store.
Differences between a bank statement and a transaction history?
A bank statement is a summary of all transactions that have taken place in an account over a certain period of time, usually a month. It includes deposits, withdrawals, electronic transfers, checks, and any fees or charges that have been applied. A transaction history, on the other hand, is a record of all transactions that have taken place in an account, regardless of the time period. It includes the same information as a bank statement, but may also include additional details such as the location of the transaction and the name of the payee.
FAQ
What is considered a bank statement?
A bank statement is an official document provided by a financial institution that along with identifying information lists all of the transactions that have taken place in a specific account over a certain period of time.
What does a bank statement need to show?
A bank statement needs to show account number, account type, period covered, opening and closing balance, list of transactions, any fees or charges, available credit and interest earned. Additionally, it must be accurate and reflect all transactions that have taken place during the period covered.
How long should I keep my bank statements?
It is recommended to keep bank statements for at least three to seven years as the IRS may require supporting documentation for that period of time after a return is filed. As well as bank statements, it’s important to save any document that clearly shows income and expenses which can then verify information on your tax return, including brokerage statements, Forms W-2 and 1099, tuition payments and charitable donation receipts.
