What is an Account Statement
An account statement is a periodic summary of account activity with a beginning date and an ending date. The most commonly known are checking account statements, usually provided monthly, and brokerage account statements, which are provided monthly or quarterly. Monthly credit card bills are also considered account statements.
BREAKING DOWN Account Statement
Account statements refer to almost any official summary of an account, wherever the account is held. Insurance companies may provide account statements summarizing paid-in cash values, for example. Statements can be generated for most any type of accounts that represent ongoing transactions where funds are repeatedly exchanged. This can include online payment accounts such as PayPal, credit card accounts, brokerage accounts, and savings accounts.
Utility companies, as well as telephone and subscription television service providers, usually generate account statements for their customers, detailing their usage and any overages during the payment cycle. Such statements typically list debits paid, incoming funds or credits received by the account holder, and fees associated with maintaining the account. For example, certain types of savings accounts might incur regular maintenance fees unless a certain minimum balance of funds is maintained in the account. Cable television subscriptions may include state taxes and other surcharges that are included with providing regular service.
How Account Statements Are Used
Account statements should be scrutinized for accuracy, and historical statements are critical for budgeting. A credit or loan account statement, for example, may show not only the outstanding balance due but the interest rate charged on that debt and any fees that have been added during the payment cycle. This can include late charges for payments not received by their due date, overdraft fees when bank account holders overspend.
The statement may also list financial information that relates to the account holder such as their credit score, or the estimated time it will take to completely pay off a debt via installment payments. Alerts and notices to the account holder may also appear on these statements, calling attention to matters with the account that need to be addressed, such unusual charges that should be reviewed and verified.
Anomalous items on an account statement may be a sign the account has been compromised, perhaps through a stolen credit or debit card or through identity thieves who gained access to account information. For example, an account holder or the financial institution might spot a charge for concert tickets or a luxury item that seem out of the ordinary. Account holders may be able to dispute such out-of-place charges and file a claim that they did not make the purchase themselves.