A bank statement can also be called an account statement. The account statement shows if your bank is accountable for your account’s money. Accounts statements help the account holders to keep track of their money. The accounts statements enable one to keep track of their finances, identify errors and recognize spending habits. Bank statements help reduce overdraft fees, fraud, and errors when one verifies their bank account on a regular basis whether daily or weekly so as to ensure the records on the bank statements match the banks’ records.
Things that need bank statements.
Sometimes bank statements may look like unnecessary pieces of paper but can be useful in some instances. Bank statements are proof of income and a comparison tool to track how a holder spends money. Things that need a bank statement are:
i. Look for possible mistakes by the bank
ii. Balancing the checkbook.
iii. File for your bank records.
iv. Knowing where your money in your Bank Account goes.
v. Track interest and interest rates in the holder’s bank account.
We are going to discuss these things that need a bank statement here in this article.
1. Look for possible mistakes by the bank.
When you identify a mistake in your bank calculations and transactions, a bank statement is needed to rectify that and check where the mistakes came in. The bank statements provide an additional opportunity to catch and correct that mistake on time.
Such mistakes include overcharges and fraud transactions by merchants which enables identity theft. With original bank statement receipts, it is easier to correct these mistakes when reported.
2. Balancing the Checkbook.
Bank statements are needed in the process of reconciling the holders’ bank accounts. By this, you will compare your own spending records to that on the bank statement records.
Balancing the checkbook enables you to keep track of how you are spending money, make an appropriate budget, know how much money is in your account and be able to monitor how the money in your bank account is going, and be able to plan for the future.
3. File for your bank records.
A bank statement is needed to verify deductible expenses that a holder claims on their tax returns or use the bank statements as proof of income. It is fully recommended that bank customers keep their bank statements for as long as a year or so before destroying them.
4. Knowing where your money in your Bank Account goes.
Bank statements are needed to help you to know where your money in the bank account goes. Through these statements, you are able to keep track of the money that is coming in into your bank account and the money that is coming out of the bank account.
All the transactions that are made into and out of the holder’s account are recorded and tracked. In case of any withdrawals of money and depositing of money into the account, you will be able to track it on the account’s statements.
5. Track interest and interest rates in the holder’s bank account.
Interest expenses is a non-operational expense that shows on the account statements. By this, you are easily able to track the interests and the interest rate, and the final number of balances available in your bank account.
Bank statements will enable you to account for the rates available in your bank accounts.
In conclusion, bank statements are needed by bank account holders for many different purposes. Bank statements are needed to show detailed activities in the account of the account holder.
Through these statements, you will be able to identify mistakes in your accounts and check for a balance between the personal known records and those records of the banks. You will be able to know where your money goes and make a budget with the money balance available in your bank account.
Frequently asked questions about bank statements
1. Can my bank let someone else see my bank statements?
Banks never allow unauthorized individuals or third parties to see your account statements. The only person who can view your account statement online is the only person with your personal account details, card number, banking details, and pin number.
2. Does my account statement contain very sensitive information?
Yes. Account statements or bank statements contain sensitive information that as the account number and account branch name. Most bank statements include a summary of account balances, deposits, withdraws, and closing balances some of which are sensitive.
3. How often should one ask for bank statements?
To maintain a good track of our finances in the bank it is wise to check your bank statements at least once a week. Some people prefer to check with their banks once a month which is also okay depending on the frequency of bank use.