A bank statement is a document prepared by your financial institution each month. With a bank statement, you can see all of the income and spending activity related to the account.
Understanding your bank statement can help you learn more about your money habits and make better financial choices. Let’s take a look at what’s included in a bank statement and how it can provide you with a detailed picture of your finances.
What Is a Bank Statement?
Your bank statement details all of the transactions made with your account in a month. By looking at your bank statement, you can see all of the money that has come into your account and out of your account in one place. For each transaction, dates and other parties are shown as well. That way, you can see whom you paid (or who paid you) and the date the transaction actually cleared the bank. With this information, you can manage your savings and make better financial choices.
A typical bank statement includes the following information:
- Personal identifying information, such as your bank account number, name, and address
- The period of time covered by your bank statement, usually encompassing a month. However, statements don’t always start at the beginning of the month. For example, your statement could run from the 13th of the month to the 12th of the next month.
- Information about the bank, including the customer service number and instructions for reporting fraud and mistakes
- The balance for both the start and end of the statement period
- All of the deposits into your account, including direct deposits, checks, transfers, reimbursements, payments, on-us items, and interest earned
- All the withdrawals from your account, including purchases, transfers, ATM withdrawals, automatic payments, and bank fees
How Does a Bank Statement Work?
A bank statement is designed to show you exactly what happened with your account during the past month, detailing your spending habits and any incurred expenses.
Most bank statements start by grouping all deposits together, giving you an idea of exactly what came into your account during the preceding month. Next, you’ll see your withdrawal activity summarized. Your summary will include your account balance at the beginning of the month, then show your ending account balance after all of the deposits are added and the withdrawals are made.
Below the summary, the bank statement will go on to show each individual transaction you engaged in, along with the corresponding dates, amounts, and payees. With a checking account, a bank statement can be several pages long, depending on how many times you use your account to cover expenses. In general, you see your transactions in the order they occurred. The detailed list of transactions will give you an idea of when the money comes into your account each month, and when the money goes out.
Your transaction detail also includes information about where the deposit came from and where the expense went. Carefully review the transactions, especially the expenses, to make sure they’re accurate.
If you notice any inaccuracies on your bank statement, you should report them to your financial institution right away. Generally, you have 60 days to dispute any inaccurate or fraudulent information.
In some cases, your bank statement can also provide you with documentation that allows you to get a loan.
How Long Should I Keep My Bank Statements?
In some instances, such as applying for a loan or getting a divorce, you may need to pull up your bank statements from previous years. By law, banks are required to keep records of your bank statements for at least five years, and you should be able to access them within that time frame—even if your account is closed. Depending on the bank, you may have to pay a fee to access statements that are more than a year or two old.
If you need to save statements from the past, it’s possible to download them to your computer and store them in an encrypted folder or keep paper copies. In general, when you no longer need a bank statement, you should shred paper copies and delete electronic copies.
Paper Bank Statements vs. Electronic Bank Statements
Most banks allow you to choose how you want to receive your bank statements. You can receive a paper statement in the mail, or you can have an electronic bank statement posted to your account.
Some banks charge a fee for a paper statement, so it might make sense to go paperless and get your statements electronically.
To access your electronic bank statements, it’s usually required that you log into your account and look for a navigation item that indicates bank statements. This might be under a heading like “Services” or “Account Information” if a statement option isn’t immediately visible on your navigation. Once you locate your statements, you can choose which month to look at. Usually, it’s possible to save your statement as a PDF on your computer or print it out.
- Your bank statement is a summary of all activity in your account across a certain time period.
- A bank statement details all of your transactions—including deposits and withdrawals—so you can identify potential fraud.
- You can choose to receive your bank statements as hard copies or electronically, but you may be charged a fee if you get statements through the mail.
- Banks are required to keep accessible records of your bank statements for at least five years—even if your account is closed.