It is good news for those people who are responsible savers and spenders or bad news for those who aren’t. Either way, a bank statement helps you keep track of your money, no matter how little or how much you have in your account.
To learn more about bank statements, just continue to read our article. It has the information you need to know about.
What Is a Bank Statement?
This is a document that can be called a summary of your financial transactions for the previous month. It is written and issued by the bank you have your account at and covers a stated time period. Usually one month(s).
The statement records all your checks, deposits, and interest payments, if any, for that time period and is usually sent out 12 times in a year. Once you get your statement, you need to check it for errors and use it to balance your checkbook.
It also helps you identify suspicious activity as well as reminds you to watch your spending habits.
Bank Statement Templates and Examples
The Main Purpose of a Bank Statement
The main purpose of the bank statement is to give you an accurate account of the financial transactions you carried out that involved your bank account at a certain bank.
In other words, it informs you of everything you have done for the previous 30 days as well as telling you how much money you have left in that account. This information can be grouped by deposits or by checks and withdrawals, or it can just be a running statement of individual transactions in chronological order.
How a Bank Statement Works?
The first step in the process is that the bank records every transaction you make regarding the account in question. That means it records every deposit, every withdrawal, every check, and every ATM transaction.
The second step is the bank printing that information either by category or in chronological order. The third step has the bank sending your statement to your home address or the address on file.
Once you receive the statement, you are to get your checkbook and compare records. This way, you can see if someone is using your account without permission or if you are spending more than you should be spending.
After comparing records, make sure the two agree so you do not accidentally overdraw it and pay more fees.
How Long Should You Keep the Bank Statements?
There is no law or set time period for you to keep your bank statement. You can toss them after balancing your checkbook if you want, But that is not always a good idea just in case you did miss some illegal activity.
However, banks are required by law to hold onto your bank statements for up to 5 years. Then if you need one for a loan, tax audit, etc., you can always ask the bank to get you a copy. Some banks may charge a fee for that service.
Requirements for a Bank Statement
The requirement for you to get a bank statement is for you to open the right account at the bank you want to do business with. But banks have more requirements to meet. For example, their name, branch, and address should be printed on the statement.
Then, the statement needs to have the date for the time period covered by the statement, the opening and closing balance of that time period, account information as well as the details of each transaction, including their dates. There should be service charges listed if any were accrued.
How to Get a Bank Statement?
The statements are sent out by mail automatically by the bank branch. But, in today’s technological world, you can sign up for paperless statements and have them sent to you electronically.
Even if you take the second option, your bank must give you a hard copy when you ask for one. You can ask online through the bank’s website, and there might be a small fee for accommodating your request.
If you are not sure how to request a statement via the internet, ask your bank for help.
Electronic vs. Paper Bank Statements
How you receive your bank statement will be up to you; however, since banks are supposed to mail them out to you, you really have to do nothing to get the paper copy. However, some people prefer doing everything online, so they opt for the electronic version.
Paper statements can be lost in the mail or get stolen from your mailbox, which are two reasons why people choose the electronic version. However, electronic versions can be hacked, stolen, and altered.
Go with the version that suits your lifestyle best.
Bank Statement vs. Transaction History
The biggest difference between these two records is the time period they cover. For the bank statement, the bank sets the time frame at 30 days, usually. Then it records all the transactions within that given time period. Pending transactions may be left off.
With the transaction history, you set the time period you want to be covered. This can be as little as a week, two weeks, or as long as several months. You get to decide what the history will cover.
Is it illegal to fake or edit a bank statement?
Yes, it is. This action is called fraud when you are doing it to deceive or mislead people into thinking it is a legitimate statement. You could go to jail or face stiff penalties for doing so.
With that said, some people have edited their bank statements to remove information that was not pertinent to the purpose the statement was issued. They said they got away with it. We cannot give legal advice so the best thing to do here is to ask a lawyer.
Is it safe to send screenshots of your bank account?
Yes and no. Sometimes it is safe of the business, etc., you are sending the statement to is legitimate and for legitimate purposes. However, since there is a lot of private and personal information on that statement, it is best to not do this.
Hackers love to get unprotected bank statements as they get your SSI number, your address, your bank account number, and so on. It is best to send or give hard copies of your statement to legitimate businesses that have the right to that information.
The bank statement gives you a very solid and honest record of your spending habits, for the most part. They are a good tool to help you analyze your saving and spending habits and encourage you to make the right changes. Just do not let it fall into the wrong hands.