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What Is a Bank Statement?

Banking, Banking Basics, Checking Accounts
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Understanding Your Bank Statement

A bank statement is a summary of your activity and transactions within a certain time period. Bank statements can help you track finances, catch mistakes and understand your spending habits. It’s a good idea to review them on a regular basis.

Bank statements usually have seven parts:

  1. Your account balance from the last statement date
  2. A list of deposits
  3. A list of withdrawals
  4. Any interest the account earned
  5. Any fees charged by the bank
  6. The new account balance
  7. Instructions for reconciling your account

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Your financial institution usually mails you a statement about once a month or quarter, depending on its banking cycle. If you’ve signed up for online or mobile banking, you might also be able to access the statement from your computer or smartphone. Some free checking accounts only offer online access to your statements.

If you view your account online, it’s still smart to print out copies so you’ll have them if you’re away from your computer or phone.

Reconcile your account

You should regularly review your bank statements to make sure everything is accurate. “Reconciling your account” — or matching up your own record of deposits, withdrawals, interest and fees with the information on your bank statement — can help you catch any mistakes or even fraud. It can also help you avoid overdraft fees if the bank statement shows that you have less money than you think.

When looking at your own records, remember to pay attention to the statement’s end date, since transactions made after that date will appear on your next statement.

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Correct mistakes

When you reconcile your account, you might see charges on your bank statement you don’t remember making. Or, you might see transaction amounts you don’t think are accurate. For example, you remember paying $24 at a restaurant but it shows up on your statement as $42.

It’s worth taking a few minutes to find the reason for the discrepancy. It could be that you made a purchase you forgot about, or you recorded the wrong purchase amount in your software app or check records.

If you see a mistake, you’ll want to report it to your bank or credit union. You’ll usually have 60 days from your statement date to dispute any errors.

Keep records

After you review a paper statement, you should file it in a safe place and keep it for at least a year. You’ll probably need to refer to the statement when it comes time to file your tax return. And if you plan to refinance or buy a home in the near future, potential lenders might want to see several bank statements when you apply for a loan. You can access online statements as needed.

Bank statements are a great tool to help you track your money and stay on the same page as your bank or credit union.

Margarette Burnette is a staff writer at NerdWallet, a personal finance website. Email: mburnette@nerdwallet.com. Twitter: @margarette.