What is a bank statement and how do you read one?
July 21, 2022 4 min read
Keeping tabs on your checking or savings account activity is an important part of any money management strategy. And reviewing your monthly bank statements is a great way to stay on top of your finances.
Keep reading for a closer look at bank statements and why they’re so important.
- Bank statements are a record of all your account transactions in a specific period of time—usually covering monthly account activity.
- Statements can include information such as account balances, deposits, withdrawals, fees and contact information.
- Reviewing your statement can help you monitor your spending habits and check for fraudulent activity on your account
- Depending on your personal preferences, you might receive bank statements online or through the mail.
What is a bank statement?
A bank statement is a record of all the banking transactions—including deposits, withdrawals and transfers—that apply to your account over a given period of time.
Your bank statement may also include the starting and ending balances of the account, your account number and other important account information.
You should receive an account statement for any deposit account you have with a bank, including a savings account, checking account, money market account or certificate of deposit (CD).
Your bank will usually send you bank statements each month, but may also issue them quarterly, depending on your account type.
What does a bank statement look like?
The layout and information included on a bank statement may vary from bank to bank. And it may also look a little different depending on whether you receive a paper copy or an online statement.
Here are the types of information you can expect to see on your bank statements:
- Name and address
- Account number
- Statement period, including beginning and end dates
- Starting and ending balances
- Deposits, including cash deposits, check deposits and direct deposits
- Withdrawals, including ATM withdrawals
- Electronic fund transfers
- Account credits
- Account debits
- Interest earned
- Bank contact information
How to get a bank statement
Bank statements are typically mailed to the account holder’s address on file. However, many financial institutions encourage customers to go paperless to receive electronic statements.
You can typically view your electronic statement by accessing your account through your bank’s website or mobile app.
Why are bank statements important?
Regularly checking your bank statements can help you track your spending habits. Using it along with your credit card statement can start to give you a complete picture of your finances. And this information can help you adjust your spending to support your financial goals and create a budget.
Looking at your financial activity can also help you monitor your accounts for fraudulent or unauthorized charges. If something seems off, you can compare the account activity and your balance with your personal records and work with the bank to resolve any errors.
Bank statements may also come in handy anytime you need to provide proof of income, like when you apply for a mortgage or personal loan.
How long should I keep bank statements?
How long you should keep your bank statements largely depends on how you’re using them. If you’re using your bank statements strictly to monitor your own spending and saving habits, you may only need to keep them for a year. However, the FDIC recommends keeping any bank statements used for tax preparation for at least seven years.
Banks are required by law to keep account records for at least five years. So you may want to download any statements you plan to keep for longer than that period of time. You may also be able to access your account’s past bank statements online.
Bank statements in a nutshell
A bank statement gives you a comprehensive look at all of the activity happening in your checking, savings or other financial accounts within a given period of time. Looking over your monthly statements can help you spot potential problems with your accounts and track your spending habits.
If you’re shopping for a new savings or checking account, Capital One has several types of accounts to consider. And you can open a Capital One checking or savings account in as little as five minutes.