Bank Statements help keep track on spending
A bank statement is a summary of financial transactions that happened at a certain institution during a specific time period. For example, a typical bank statement may show your deposits and withdrawals for a month. Bank statements allow you to check for errors, watch for suspicious activity, and track your spending.
Though a lot of people might know what a Bank Statement means, some always find it difficult to read and understand it. Here is a chance to learn how to read your Bank Statement and it is not as hard as you might think it is.
One of the benefits of reading your bank statement is that it will enable you to track your finances to know when you are overshooting your budget.
The evolution of technology has made it easier for you to access your bank statement at your comfort zone and there are a number of reasons why you will be in need of your bank statement. These include when you are applying for a loan, when in need of mortgage loan or for permanent residency/schooling outside the country and it is appropriate that you should be able to read them in order to be able to answer some of the questions that they might be able to throw at you.
Here are tips that will serve as a guide on how to read your bank Statement
1. PERSONAL INFORMATION/ACCOUNT DETAILS
The first thing to do when you get your account is to check your name and account number. The reason for doing so is to be sure that there is no mistake with your name and also to be sure that you are reading your own statement of account.
You can access your account using your debit card pin, or your account number. There some banks that encode the bank statement that you can read it using your account number.
2. STATEMENT PERIOD
Bank Statement is usually sent to you every month, gone are those days that you have to queue in the banking hall just to get your statement. With the evolution of technology, you can now get your bank statement of account sent to your mail which you can access using the account number of your debit cards pin.
Having received your statement of result and you have ensured through that your name and the account number is correct, the next thing to do is to check the date the statement covers.
Bank statement is usually sent every month, though there is a quarterly and yearly statement. Confirmation of the date will guide you on what
period of your financial history the statement is about as it is critical to the bank balances.
3. STATEMENT SUMMARY
Most bank statements will give you a snapshot of your account by providing the opening and closing balance, there is the uncleared and cleared balance. The balance column is also very important.
Opening balance shows the balance in your account at the beginning of the month or beginning of the statement period while closing balance gives you the balance in your account at the end of the period the statement covers.
Cleared and uncleared balances refer to cheque/s you paid into your account. When cleared, it means that the Cheque has gone through clearing successfully and this will form part of your closing balance otherwise the Cheque is still in clearing and the value will not reflect in your closing balance.
The balance column shows the balance after every debit or credit transaction consummated on your account.
4. DEPOSIT DETAILS
All deposits during the statement’s period are in a column, deposits include cash and Cheque lodgements, including interest paid to you by your bank during the period covered by the statement. You will be able to verify all cash and cheques that were paid into your account during this period including the amount of interest the bank has paid into your account if your account is interest bearing.
This column will also contain reversals of excess charges, wrong debits now reversed and all other credits into your accounts by the bank. The narration part will let you know what the amount credited into your account is for.
5. WITHDRAWAL DETAILS
All withdrawals during the period covered by the statement are in another column. Funds paid from your account to a third party including your personal cash withdrawals are in this column.
This column contains charges debited into your account by your bank, AMC and statutory charges like VAT on Account Maintenance Charges, Stamp duty charges, withholding Tax and other statutory charges. The column also contains reversal of wrong credit into your account and all other withdrawals due from your account.
6. BANK CHARGES
This is the most important reason to check your bank statement. All charges can be found in the withdrawal column of your statement of a bank account.
Bank charges include Account Maintenance Charges (AMC), VAT on AMC, Stamp Duty Charges, Withholding Tax and all other bank
7. BANK INTEREST
Some banks pay interest on their checking accounts. If you earned interest during the period, your bank statement will show how much you earned. If you have multiple savings accounts under the same umbrella account, the statement may show the total interest paid as well as the total interest for each account.
Some banks will also list the amount of interest you’ve earned over the life of the account.
8. ERRORS CHECK
Although you may not find them very often, mistakes do happen from time to time. It is essential that you comb through each and every detail of your bank statement, looking for errors. You never know when you will get charged for something you didn’t purchase, or get hit with a fee that is not fair.
If you don’t catch this on your bank statement, chances are that it will go unnoticed. If you find a fee that you think is unwarranted, be sure to call up the customer service line or your account officer and ask that it be removed from your account.