What is a bank statement and why is it important?

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In a Nutshell

A bank statement is a document that lists transactions posted to your bank account during the statement period, which is typically a month. You can use a bank statement to track your spending and verify the accuracy of each deposit, withdrawal and account-related fee.
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A bank statement isn’t just another piece of junk mail. It’s a vital tool for keeping track of your spending and saving.

Now that online and mobile banking tools mean account details are always at your fingertips, reviewing your bank statements might seem like an unnecessary chore. While technology makes managing money day-to-day easier, bank statements still serve a purpose. We’ll help you understand what a bank statement is and why it’s still important.



What is a bank statement?

A bank statement is a document that details each transaction that occurred during a statement period. You’ll typically get a bank statement each month.

But if you don’t make any electronic transactions during the month — such as deposits, ATM transactions or bill payments — the bank or credit union may send quarterly statements instead.

You typically receive separate statements for each bank account. But if you have multiple accounts at one financial institution —  a checking account and a savings account, for example — you may receive several statements together on one document.

Paper bank statements vs. electronic statements

Paper bank statements and digital bank statements usually have the same information on them. The main difference between the two is how they’re delivered.

Paper bank statements come in the mail, which means there’s a risk they could be lost or stolen. If you choose to receive bank statements electronically, you usually get a heads-up through email when your statement is ready at the end of each period. From there, you can log into your online bank account dashboard to view, download and print it. 

What information is on a bank statement?

What’s on a bank statement can vary from one bank to the next. A typical bank statement lists the account holder’s name, account number, annual percentage yield, the interest earned for the period and any account fees.

Bank statements also list the opening and closing balances for that statement period. Each deposit and withdrawal appears in chronological order. Payments authorized from your account might have transaction details, including the payee. And each deposit may list how the deposit was made and who it’s from.

How much does it cost to get a bank statement?

How much it costs to receive statements varies depending on the account, type of statement and financial institution. Online statements are usually free. Paper statements may be free, or there may be a fee. Some financial institutions may charge if you want a statement that shows images of checks and deposit slips. Fees for printed statements vary but may be around $1 to $3 each.

How can I get a paper statement?

In your online account dashboard, you may be able to change your delivery preference — just keep in mind that switching from online to paper statements may come with a fee.

If you just need one specific statement copy, you may be able to request it online or by contacting your bank’s customer service. Take note, though: Banks may charge an additional fee for statement copies.

What to do with a bank statement

When you get your statement each month, here are a few things you can do with it.

  • Reconcile transactions — Make sure your receipts for deposits, ATM withdrawals and bill payments match up to the bank statement.
  • Review your expenses — If you don’t have a formal budget, looking over your payments and withdrawals is a way to track your spending. If you have bills set for automatic payment each month, such as Netflix or a gym membership, a scan of your statement could remind you of services to cancel or renegotiate.
  • Watch out for inaccuracies or fraudulent transactionsLook carefully for mistakes or transactions you didn’t authorize and report them as soon as possible.
  • Keep statements somewhere safe — Your bank statements may include sensitive information that you don’t want to get into the wrong hands. Consider shredding bank statements you don’t need or storing them in a place that visitors can’t access.

How long should I keep a bank statement?

The FDIC recommends keeping your bank statements for up to a year unless information on your bank statements is needed to back up what you filed on a tax return. In that case, the FDIC recommends keeping your statements for seven years.

Financial institutions are required to keep deposit account records for at least five years when there’s a deposit over $100. And they may choose to keep them longer than five years. So if you’re missing a bank statement, you might be able to request a copy.

Why is a bank statement important?

Even though you may be able to review an account summary and transactions online in real-time, periodic bank statements are still important for several reasons. When applying for a mortgage or personal loan, a lender may ask for bank statement copies to verify direct deposits and other income.

Bank statements can also help you budget. You can use them to identify spending habits and areas where you could cut back. Reviewing transactions could also help you monitor for identify theft and banking-related errors.


What’s next? Simple steps to reconcile your bank statement.

When you get your bank statement for the month, here are some steps to take next.

  1. Check the beginning balance. Make sure your starting balance is accurate. If not, there could be a deposit or check missing.
  2. Review each transaction in between. Compare your receipts from debit card transactions, bill payments and deposits to your bank statement to ensure they match. Be sure to account for any fees the bank may have applied to your account, such as overdraft or NSF fees.
  3. Look at the ending balance. Double-check that your ending balance is correct and includes any deposits you made before the close of the period.

If everything checks out during the reconciliation, your job is done. Put your bank statement in a safe place and consider repeating the process next month. Making this a habit could pay off if it helps you catch any mistakes and better manage your cash.


About the author: Taylor Medine is a freelance writer who’s covered all things personal finance for the past seven years. She enjoys writing financial product reviews and guides on budgeting, saving, repaying debt and building credit. … Read more.