What is a bank statement?

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You’re probably somewhat familiar with bank statements if you have a bank account. Chances are, you’ve gotten a statement in your inbox or mail every month. But you may not know exactly what’s in your bank statement – and why it’s important to review it each month.

Bank statements can help you track your income and expenses, identify errors or fraud, and make better financial decisions. Let’s take a closer look at what they are and how they work. 

What is a bank statement?

A bank statement is a summary of all the transactions in your bank account over a period of time, typically a month. Transactions include all deposits, transfers, and withdrawals. Each bank account will typically have its own statement. 

Bank statements offer an overview of your financial activity and help you keep track of where your money is coming and going. By reviewing your statements, you can make sure your records match the bank's records and that there are no unauthorized transactions or errors.

What’s included in a bank statement? 

A typical bank statement will contain the following information:

• Account holder information, such as name and address
• The account type (checking, savings, money market, etc.)
• The account number and possibly the bank’s routing number
• The start and end dates of the period covered by the statement, usually a month
• The amount of money in your account at the beginning and end of the statement period
• A detailed list of all the transactions that happened during the statement period, including deposits, withdrawals, payments, and fees
• Interest earned on the account or any interest charges for overdrafts or loans (if applicable)

How often do you receive a bank statement? 

Most banks offer monthly bank statements — either via mail or electronically. Some accounts, such as CDs, may offer quarterly or annual statements. Many banks now offer on-demand statements, which allow you to generate a statement for a specific period at any time.

The exact date you’ll get your bank statement will depend on the financial institution and the date you opened the account. For example, you may have an account with a statement period from the 1st of the month to the 1st of the next month or the 10th of the month to the 10th of next month. 

How to get a bank statement 

Traditionally, bank statements are mailed to account holders. However, with the rise of online banking, many banks now offer electronic statements as an alternative. E-statements are delivered through the bank's online banking portal or via email.

There are several benefits to choosing e-statements over physical statements. E-statements are less likely to be lost or stolen, reducing the risk of identity theft or fraud. Plus, using e-statements reduces paper waste, which is better for the environment. Many banks also now charge a small fee for paper statements. 

Why should you review your bank statement?

Reviewing your bank statement might seem unnecessary. After all, you can check your balance online. However there are several reasons why you should make a habit of reviewing your statements.  
Reviewing your bank statements can help you: 

Track your income and expenses 

Your checking account serves as the center of your financial life. When you get paid, your employer deposits money into your checking account. When you get money from an ATM, swipe your debit card, or pay a bill, the cash comes from your checking account.

Your bank statement records all the money entering and leaving your account. Reviewing your statement helps you track your cash flow and ensure that you're not spending more than you're earning. You can also analyze your transactions to identify areas to cut back.

“Before opening your statement, estimate how much you earned and spent over the last month. Then, open the statement to see how close you were,” says R.J. Weiss, a certified financial planner. “Many are surprised by what these actual numbers are, and it can be a wake-up call to change things.”

Detect errors or fraudulent activity

Reviewing your statements regularly can help you catch any errors or unauthorized transactions. 
Sometimes, merchants may accidentally charge you twice or incorrectly bill you for a purchase. Let’s say you bought something at a farmers market for $15. Somehow, the transaction was entered incorrectly, and you were charged $150. Reviewing your statement and reporting the error to the bank can help you recover your money.

If you notice any transactions you did not make, it could be a sign of fraud or identity theft. Fraud is extremely common: There were around 2.6 million fraud cases from consumers in 2023, according to the Federal Trade Commission. 

If you identify any errors or potential fraud, report them to your bank immediately to resolve the issue and prevent further damage.

Reconcile your accounts

Reconciling accounts means comparing two sets of records to make sure they match. Reconciling your bank statement with your personal financial records helps ensure the accuracy of your accounts.

When you get your bank statement, check each transaction against your budgeting app or other personal records. Make sure that all transactions are accurate and match your records. If you find any discrepancies, let your bank know. Banks aren’t perfect, and they can make mistakes.

Regular reconciliation helps you keep your financial records up-to-date and accurate.

Budget effectively 

You’ll typically get a statement for every account you have, including your checking, savings, investing, and even loan accounts like mortgages. This makes your bank statements a valuable tool for budgeting and financial planning. 

When you get your statement, review your income and expenses. Use this information to create a budget that aligns with your spending patterns. You can also use bank statements to track your progress toward financial goals, like building an emergency fund or paying off a loan.

Your bank statement can help you identify areas for reducing expenses or allocating more money to savings or investments.

How to read a bank statement 

Bank statements contain a lot of information, so it’s easy to get overwhelmed. Here’s a breakdown of some of the key parts of a bank statement and how to understand it. 

Identifying key information 

Bank statements often put the most important information near the top of the page. You’ll see the bank’s name and logo, the statement date, and your name and address as soon as you look at the statement.

Right below that will be your account number and the start and end dates of the period covered by the statement. You’ll also see the amount of money in your account at the beginning and end of the statement period.

“Most of the larger banks provide [this] cash flow summary,” says Weiss. “If your bank statements consistently show a negative number here, it's a sign changes are needed.”

Reviewing transactions

Below your account information will be a full list of the transactions made during the statement period, ordered by date. The statement will have a line for each transaction, indicating:

• The date of the transaction
• The type of the transaction (deposit, withdrawal, debit card purchase, etc.)
• A description of the transaction
• The amount of money credited or debited
• The balance of the account after the transaction

Many banks may also send you a copy or scan of any check you’ve written that’s been deposited.

Keep in mind that in some cases, a transaction may be difficult to understand or won’t offer a lot of information. For example, the name of the merchant or payee may be confusing. That means you might need to do some sleuthing or keep good records if you’re trying to reconcile your statements.

When reviewing transactions, consider having multiple statements side-by-side. Comparing them can help you keep track of subscriptions or recurring payments, especially if they happen on the same date each month.

Understanding fees and charges 

Your statement will show a list of all your deposits, withdrawals, and purchases. It will also include any fees or charges your bank assesses against your account. 

Some accounts charge a monthly maintenance fee, which can sometimes be waived by meeting certain requirements. You may also incur fees if you use an out-of-network ATM or overdraw your account. 
Look through each statement to see what fees you’re paying. Take a moment to consider whether there’s a way you can reduce the fees you pay or avoid them entirely.

Frequently asked questions about bank statements 

The bottom line

Your bank statement is one of the most important financial documents you’ll receive monthly. By regularly reviewing your statements, you can:

• Keep track of your income and expenses
• Identify errors or fraudulent activity
• Reconcile your accounts
• Make smart budgeting decisions

Spending just five minutes a month reviewing your statement can help you remain more aware of your finances and identify errors or fraud before they become serious issues.

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.