Are you looking to find out what a bank account statement is? In this article, you will find out how the bank account statement works and the perks of a bank statement. A bank statement has all the details about transactions in a depositor’s current or savings account. Bank statements are an easy way for account holders to check their finances.
What is a bank account statement?
The bank statement is a document given by the bank to its customers every month that shows all the customer’s financial activities during that period. A monthly bank account summary includes all fund transfers, money deposits, and withdrawals made by the customer during the entire month.
Each account’s balance at the start and end of the month is given in the bank statement. The contact details of the banks are also given in the bank statements. It records your bank account activity, and you can easily track your transactions through your bank account statement.
Banks also give account statements to the account holders. These are great tools for keeping track of your expenses. Plan to save money by finding areas where you can lower spending your money by checking your monthly savings.
Importance of account statements
Giving your clients a summary of the goods and services billed to them is a great way to keep them informed. Also, the application status assists business owners in verifying the payments that clients have already made in one month.
- As it gives the business owner an idea of the customer’s regular spending, it can also be used as a tool for payment reminders.
- The summary report of the statement gives a business owner the ability to decide whether a client has paid his debts whenever there is an inconsistency in the company’s records.
- The business owner can also use the application status to confirm that the amount due includes the customer’s initial payments.
- The statement of accounts also gives business owners a precise record of the prices they have been charged by the banks for various banking services.
- This allows them to follow a user’s information and helps them spot issues.
Why are bank statements used?
A bank account statement shows account activity and verifies that the credit and debit balances match up correctly.
The following benefits are available to account holders who choose to read their bank statements online:
1. Protects against financial fraud
- The monthly withdrawal and deposit amounts from an account are printed on bank statements.
- Banks use smart document processing systems to list details on these records, which aids users in finding out any anomalies or mismatches in quantities.
- Financial fraud can be detected by comparing the bank’s transaction records to yours.
- Records are correct and certified if there is no mismatch.
2. Lowers errors in accounting
- E-bank account statements and the application status are more valid than manual data entry of financial information since it is less prone to human error.
- Organizations use automated bank statement solutions to extract financial data, verify it, and input it into their records.
- Many banks use document AI software for this function, which is also quick, precise, and safe.
3. Displays settlements, fines, and account balances
- Users get an entire list of their transactions when they study their bank statements, which is one of the main perks.
- Users can check their account balance, fines, and charges to know better about the account’s money flow.
- Account holders get to know about the prohibited transactions so that they do not have to pay any hidden fees.
How Do I Use a Bank Statement?
Bank statements are simple bank documents that aid in everything related to your account, from expense monitoring to finding errors.
You can get the below-mentioned things with a bank statement:
- Keep an eye on your spending: Review your monthly bank statement to keep track of your spending.
- Keep an eye on your bank balance: You can reduce overdraft costs by always having enough money to cover payments and ATM withdrawals. Check your bank account carefully for irregularities, duplicate charges, and inconsistencies.
- Apply for a loan: Whether you are applying for a personal loan or a mortgage, your lender may require bank statements to document your current financial situation.
- Rent an apartment: Before signing a lease, a landlord or rental company might ask to examine your bank statements.
- Finance your house: Financial institutions could ask to examine bank statements if you intend to refinance your home. When filing your tax return, you might need to look at your bank statement.
- Keeping records: You may need them later or at any time in the future, so store your statements safely.
You can have a better understanding of where your money has come from and gone by learning how to read and use your bank account statement. Also, it can aid in account organization and prevent costly spending errors. You can now choose how you want to get your monthly bank statements from most banks. You can choose a paper statement or apply online to have an e-bank statement mailed to the email address you have on file.
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