July 21, 2022 |4 min read
Keeping tabs on your checking or savings account activity is an important part of any money management strategy. And reviewing your monthly bank statements is a great way to stay on top of your finances.
Keep reading for a closer look at bank statements and why they’re so important.
Key takeaways
- Bank statements are a record of all your account transactions in a specific period of time—usually covering monthly account activity.
- Statements can include information such as account balances, deposits, withdrawals, fees and contact information.
- Reviewing your statement can help you monitor your spending habits and check for fraudulent activity on your account
- Depending on your personal preferences, you might receive bank statements online or through the mail.
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Learn MoreWhat is a bank statement?
A bank statement is a record of all the banking transactions—including deposits, withdrawals and transfers—that apply to your account over a given period of time.
Your bank statement may also include the starting and ending balances of the account, your account number and other important account information.
You should receive an account statement for any deposit account you have with a bank, including a savings account, checking account, money market account or certificate of deposit (CD).
Your bank will usually send you bank statements each month, but may also issue them quarterly, depending on your account type.
What does a bank statement look like?
The layout and information included on a bank statement may vary from bank to bank. And it may also look a little different depending on whether you receive a paper copy or an online statement.
Here are the types of information you can expect to see on your bank statements:
- Name and address
- Account number
- Statement period, including beginning and end dates
- Starting and ending balances
- Deposits, including cash deposits, check deposits and direct deposits
- Withdrawals, including ATM withdrawals
- Electronic fund transfers
- Account credits
- Account debits
- Fees
- Interest earned
- Bank contact information
How to get a bank statement
Bank statements are typically mailed to the account holder’s address on file. However, many financial institutions encourage customers to go paperless to receive electronic statements.
You can typically view your electronic statement by accessing your account through your bank’s website or mobile app.
Why are bank statements important?
Regularly checking your bank statements can help you track your spending habits. Using it along with your credit card statement can start to give you a complete picture of your finances. And this information can help you adjust your spending to support your financial goals and create a budget.
Looking at your financial activity can also help you monitor your accounts for fraudulent or unauthorized charges. If something seems off, you can compare the account activity and your balance with your personal records and work with the bank to resolve any errors.
Bank statements may also come in handy anytime you need to provide proof of income, like when you apply for a mortgage or personal loan.
How long should I keep bank statements?
How long you should keep your bank statements largely depends on how you’re using them. If you’re using your bank statements strictly to monitor your own spending and saving habits, you may only need to keep them for a year. However, the FDIC recommends keeping any bank statements used for tax preparation for at least seven years.
Banks are required by law to keep account records for at least five years. So you may want to download any statements you plan to keep for longer than that period of time. You may also be able to access your account’s past bank statements online.
Bank statements in a nutshell
A bank statement gives you a comprehensive look at all of the activity happening in your checking, savings or other financial accounts within a given period of time. Looking over your monthly statements can help you spot potential problems with your accounts and track your spending habits.
If you’re shopping for a new savings or checking account, Capital One has several types of accounts to consider. And you can open a Capital One checking or savings account in as little as five minutes.
As an enthusiast and expert in personal finance, I bring a wealth of knowledge to the importance of managing one's financial accounts effectively. Over the years, I've closely followed trends, regulations, and best practices related to banking transactions and account management. My expertise is not only theoretical but grounded in practical experience, having navigated various financial landscapes and aided others in optimizing their money management strategies.
Now, let's delve into the article you provided, dated July 21, 2022, which emphasizes the significance of keeping tabs on your checking or savings account activity through regular review of bank statements. The article breaks down key concepts related to bank statements and their importance:
1. Bank Statements Overview:
- A bank statement is a comprehensive record of all transactions related to a bank account over a specific period, typically a month.
- It encompasses details such as deposits, withdrawals, transfers, starting and ending balances, account number, and other essential account information.
2. Contents of a Bank Statement:
- Name and Address: Personal details of the account holder.
- Account Number: Unique identification for the account.
- Statement Period: Specifies the timeframe covered by the statement.
- Balances: Starting and ending balances of the account.
- Transaction Details: Deposits, withdrawals, electronic fund transfers, ATM transactions, account credits, and debits.
- Fees: Any charges incurred during the statement period.
- Interest Earned: Information on interest accrued.
- Bank Contact Information: Details to reach out to the bank.
3. Receipt of Bank Statements:
- Bank statements are typically sent monthly, but the frequency may vary based on the account type (savings, checking, money market, or CD).
- They can be received through traditional mail or electronically, with many banks encouraging paperless statements.
4. Accessing Bank Statements:
- Online Access: Many financial institutions provide the option to view statements online through their websites or mobile apps.
- Paperless Statements: Encouraged by banks to reduce environmental impact.
5. Importance of Bank Statements:
- Financial Monitoring: Essential for tracking spending habits and creating a comprehensive financial picture.
- Fraud Detection: Regular review aids in identifying unauthorized or fraudulent activities.
- Budgeting Support: Used in conjunction with credit card statements to adjust spending and support financial goals.
- Proof of Income: Necessary for financial transactions like applying for a mortgage or personal loan.
6. Retention Period:
- Personal Use: If for personal spending monitoring, retaining statements for a year may suffice.
- Tax Preparation: The FDIC recommends keeping statements used for tax preparation for at least seven years.
- Bank Requirement: Financial institutions are legally obligated to retain account records for at least five years.
7. Digital Banking:
- Emphasis on the shift towards digital banking with electronic statements, providing convenience and accessibility.
In conclusion, bank statements are a crucial tool for financial management, providing a comprehensive view of account activity. Regularly reviewing them not only aids in budgeting and financial planning but also plays a vital role in fraud detection and compliance with financial regulations. As the financial landscape evolves, the convenience of digital banking further enhances the accessibility and efficiency of managing one's financial accounts.
