What is a bank statement?
A bank statement is a document provided by your bank that summarises your financial transactions over a specific period. It includes information about deposits, withdrawals, purchases, and fees associated with your bank account.
Bank statements are important for tracking your spending, reconciling your accounts, and monitoring your financial health. Understanding how to read and interpret your bank statement can help you stay on top of your finances and make informed decisions.
Key takeaways
- A bank statement is a summary of your financial transactions provided by your bank.
- It includes information about deposits, withdrawals, purchases, and fees associated with your account.
- Regularly reviewing your bank statement helps you track your spending, reconcile your accounts, and monitor your financial health.
What's included in a bank statement
A bank statement typically includes the following information:
1. Account information: Your bank statement will display your account details, such as the account number and account holder's name, to ensure it corresponds to your specific account.
2. Transaction details: Each transaction you made during the statement period will be listed, including deposits (money you've added to your account), withdrawals (money you've taken out), purchases, and any fees associated with your account.
3. Account balance: The bank statement will show your beginning balance (the amount you had at the start of the statement period), as well as your ending balance (the amount you have at the end of the period) after accounting for all the transactions.
Real world example of bank statements
Let's say you have a bank account, and at the end of the month, you receive your bank statement. You notice that it shows a deposit of £500, several debit card transactions for purchases you made, and a monthly account maintenance fee of £10. The statement also displays your beginning balance of £1,000 and ending balance of £750 after subtracting your withdrawals and fees. By reviewing your bank statement, you can easily track your spending, identify any errors or unauthorized transactions, and gain a clear picture of your account activity.
Final thoughts on bank statements
A bank statement is a document provided by your bank that summarizes your financial transactions over a specific period. It includes details of deposits, withdrawals, purchases, and fees associated with your account. Regularly reviewing your bank statement is essential for tracking your spending, reconciling your accounts, and monitoring your financial health.
By understanding how to read and interpret your bank statement, you can stay in control of your finances and make informed decisions about your money. If you have any questions or notice any discrepancies on your bank statement, don't hesitate to reach out to your bank for clarification and assistance.