What are Bank Statements?

The summary of the financial transactions of a financial institution is called a bank statement or an account statement. These are the details on a deposit account, a credit card, or any other type of account offered by the financial institutions over a given period of time.

The bank holds the details of the bank statements, they are typically printed on one or several pieces of paper and are available in the financial institution’s local branch for pick-up or they are mailed directly to the account holder’s address. The ATMs of certain banks also provide the facility to print of a condensed version of the bank statement at any time.

In the earlier days the bank statements were produced quarterly or even annually. With the introduction of computers in the 1960s the bank statements are generally produced every month. Nowadays this frequency is reserved to the accounts that do not carry a large volume of transactions such as investments or savings accounts. The bank statements also include features such as the promotional inserts, important notices about the changes in the fees, or the cancelled cheques or their images that are cleared through the account during the statement period depending on the financial institution.

Now the financial institutions are providing paperless statements or e-statements which provide virtual statements through online banking. These statements will help us to keep the details of our accounts confidential. Because of the identity theft concerns the virtual statement has now turned out to be the safest alternative as it does not contain tangible personal information and does not require extra safety measures of disposal such as shredding. However, for a thief who is an expert in on online banking it is easier to get a virtual statement.

How to read a bank statement?

An account statement consists of different details, which on understanding makes it very much easier to read the bank statements.

The different components of bank statements are :

1. Statement Period: It is the period for which the transaction statement is produced.

2. Account Number: The number of your account which is unique.

3. Account Summary: This will provide the up-to-date details on your account. It includes the previous balance, the total deposits, total withdrawals and service charges along to generate the new balance.

4. Cheques & Other Debits: This will give the details on the transactions where money is coming out of the account, which includes detailed cheque list, monthly maintenance charges, and withdrawal list.

5. Deposits & Other Credits: This contains the details on all transactions which are related to the money getting deposited into the account.

6. ATM Locations Used: Gives the details on the ATMs that you have used in the statement period (this is applicable only to very few banks).