What is a 'Bank Statement'

A bank statement is a record, typically sent to the account holder every month, summarizing all the transactions in an account throughout the time from the previous statement to the current statement. The opening balance from the previous month added to the total of all transactions during the period results in the closing balance for the current statement. Consumers should carefully review their bank statements and keep them for their own financial records.

BREAKING DOWN 'Bank Statement'

During reconciliation of their account with the bank's records, account holders should check their bank statement for discrepancies. Account holders must report discrepancies in writing as soon as possible. A bank statement is also referred to as an account statement. It shows if the bank is accountable with an account holder’s money.

A bank issues a bank statement to an account holder that shows the detailed activity in the account. It allows the account holder to see all the transactions processed on his account. Banks usually send monthly statements to an account holder on a set date. In addition, transactions on a statement typically appear in chronological order.

The bank statement lists checks paid, total withdrawals, total deposits, interest earned and service charges or penalties incurred on an account. In addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder’s account number and the bank’s customer service number.

For example, a bank statement may show a non-interest-bearing checking account with a beginning balance of $1,050, total deposits of $3,000, total withdrawals of $1,950, an ending balance of $2,100 and zero service charges for the period April 1 through April 30.

Electronic Statements

Many banks offer account holders the option of receiving paper statements or using paperless, electronic statements. An electronic version of a bank statement is known as an electronic statement or e-statement, and allows account holders to access their statement online where they can download or print the statement. In addition, some banks email statements to customers as an attachment. Some bank automatic teller machines (ATMs) offer the option to print a summarized version of a bank statement, called a transaction history.

Record Keeping

Bank statements are a great tool to help an account holder keep track of his money. They can help account holders track their finances, identify errors and recognize spending habits. An account holder should verify his bank account on a regular basis either daily, weekly or monthly to ensure his records match the bank’s records. This helps reduce overdraft fees, errors and fraud.

If any discrepancies are found, they must be reported to the bank in a timely manner. Account holders usually have 60 days from their statement date to dispute any errors. They should keep monthly statements for at least one year.

RELATED TERMS
  1. Account Statement

    Account statement is a periodic summary of account activity with ...
  2. Bank Reconciliation Statement

    A bank reconciliation statement is a form that allows individuals ...
  3. Financial Accounting

    The process of recording, summarizing and reporting the myriad ...
  4. Financial Statements

    Records that outline the financial activities of a business, ...
  5. Certified Financial Statement

    A financial statement, such as an income statement, cash flow ...
  6. Accounting Event

    A transaction or change recognized on the financial statements ...
Related Articles
  1. Investing

    What are Financial Statements?

    Financial statements are a picture of a company’s financial health for a given period of time at a given point in time. The statements provide a collection of data about a company’s financial ...
  2. Investing

    12 Things You Need to Know About Financial Statements

    Discover how to keep score of companies to increase your chances of choosing a winner.
  3. Insights

    Navigating Government and Nonprofit Financials

    Examining government & nonprofit financials can help you trace where your dollars are really going.
  4. Investing

    Explaining the Common Size Income Statement

    A common size income statement expresses each account as a percentage of net sales.
  5. Small Business

    Best Checking Accounts For Small Businesses

    What you need to know to choose the best checking account for your small business – and where to look.
  6. Personal Finance

    Accountant: Job Description & Average Salary

    Discover what the job description of an accountant entails, along with education and training, salary and skills necessary for success.
  7. Investing

    Why Financial Statements Are Harder to Read Than Ever Before

    Understand four major reasons that financial statements published in 2016 are more complicated and difficult to read than they were in the past.
  8. Investing

    A Guide to Bank Accounts

    Find out which type of bank account suits your specific needs.
RELATED FAQS
  1. How are the three major financial statements related to each other?

    Learn why investors analyze a company's financial statements, and how the income statement, balance sheet and cash flow statement ... Read Answer >>
  2. Which financial accounting statement contains information on a company's net sales?

    Find out which accounting statement contains information on a company's net sales as well as other key statements analysts ... Read Answer >>
  3. What is the difference between a P&L statement and a balance sheet?

    The primary difference between the profit and loss statement and the balance sheet involves their respective treatments of ... Read Answer >>
  4. How are cash purchases recorded on a company's income statement?

    Take a deeper look at the treatment of cash payments on a company's financial statements, including how specific purchases ... Read Answer >>
  5. What is a P&L statement used for?

    Discover how the profit and loss statement is used by investors, accountants and business managers to assess the health and ... Read Answer >>
  6. How do you find a company's P&L statement?

    Learn how to find a company's profit and loss statement, along with the other financial statements that companies regularly ... Read Answer >>
Trading Center