What Is A Bank Statement And How Does It Work

May 4, 2023
The bank statement contains a record of every transaction that took place for a bank account over a given period, usually a month. The transaction information in the bank statement includes all withdrawals, deposits, and charges with the specific dates and times they were made. Additionally, the cash balance at the start and end of the period is usually indicated. Account owners usually analyze their bank statements after a certain period to monitor their spending and look out for malicious activities or even mistaken charges.

What is a bank statement?

A bank statement, also called an account statement, is a monthly financial document delivered by a bank to an account holder that summarizes the account holder's financial activities for the preceding month. Account numbers and complete accounting of all deposits and withdrawals are seen on bank statements.

How bank statements work

A bank statement illustrates a record of transactions made on a bank account during a certain period of time. Transactions contained in a bank statement are usually manifested sequentially. The bank keeps track of records of every type of transaction made, the specific date they were made, and the amount of cash in each. This enables the account owner to monitor the amount of cash that was in the account before and after transactions were made.

The two main types of transactions made on bank accounts are deposits and withdrawals. A withdrawal is money taken out of an account. This includes all purchases made with debit cards, cash withdrawals through ATMs, written and cashed cheques, and point-of-sale operations. A deposit is the amount of money that is sent or put into a bank account. When money is deposited into an account, it becomes available for withdrawal. Hard currency, such as cash and cheques, to electronic deposits, like payroll cheques and wire transfers, are included in this category.

Monthly service fees, overdrafts, insufficient funds, and all kinds of fees charged from an account are usually depicted on a bank statement. Not all transactions will be reflected in the bank statement. Written but not cashed cheques are a clear instance of transactions that may not appear on an account statement until processing by the bank is completed. A running balance is usually depicted at the conclusion of the stamen period.

How to obtain your bank statement

Account holders of a majority of banks have the liberty to choose if they want to receive their account statements in the form of electronic statements (often provided via email) or paper statements by mail. Electronic bank statements, also referred to as e-statements, permit account holders to have access to their digital online copy statement that can be viewed, downloaded, and printed at any time. A transaction history, which is a condensed type of bank statement, can be accessed from some ATMs.

Some financial organizations usually put costs on the paper statement delivery method, whereas most banks that operate online only need digital delivery. Paper statements are still mostly preferred even though the use of electronic statements is very rampant.

Most account holders who prefer electronic statements nonetheless print hard copies to keep for future referencing

  • Paperless statements (e-statements).

Considering that most Americans (78%) now opt for digitalized online banking, many financial firms, banks, and credit unions, offer free online access to bank statements. The procedure most likely differs depending on the bank. Nevertheless, some of the basic steps or actions are as follows:

  • To access a bank account via a mobile app or a website, you will be required to sign up for an account if you are not signed in already
  • To access the statement for your account by clicking on the account's name and then click on the specific page or location where the bank stores its e-statements. They are usually titled 'services' or 'bank statements.'
  • In cases where a date range is required, choose the one that includes the time frame for which you need a statement to be produced.
  • You can then decide to view, download or print the account statement.
  • After completing the session, make sure you log out of your account to prevent unauthorized access to your personal information.

You can also opt to be receiving e-statements via email by changing the settings to 'go paperless.'

  • Paper Statements sent via regular mail

When you open a bank account with some banks, monthly statements may be sent to you via mail by the bank without even inquiring about the statements. The only difference between the statements sent and those online is that the ones sent via mail are hard copies. Even though you can always opt for paperless statements, the bank must always be able to provide a hard copy form of the statements whenever you ask. The following are the steps to consent to paper statements:

  • You can log in to your account using the bank's mobile app or website
  • To modify the statement settings, click on the account required and find the section of your statement where the modifications can be made
  • Find the options to have the statements addressed to you under titles such as account settings or services, and then select the option labeled 'By Mail.'
  • Be sure to save your modifications.

A service fee may be charged for the printing and delivery of the paper bank statements depending on the bank you have an account with. After the settings modification, the hard copy statements will be delivered to you. You can always reach out to the bank via a call in case you have trouble accessing or logging in to your account online or if you have any queries regarding their services.

Functions of a bank statement

Account statements are important documents that offer information in great detail about income and expenses. They have a wide range of applications, including:

  1. Tax Returns filing. When filing your tax returns, you can submit your bank statement as evidence of income. You will need to keep a meticulous record of your expenditures and income as required by IRS so as to correctly file your taxes. A majority of the employees usually receive a W-2 form with their annual earnings detailed on it from their employers. Self-employed taxpayers, or those who get income from other sources, will be required to provide more proof of their earnings through documentation like account statements.
  2. Loan applications. The loan applicant is usually required to provide the lender with recent bank statements for the application procedure to proceed. This is usually necessary because the borrower's capacity to repay the loan and financial history can be deduced from the bank statements.
  3. Finding out suspicious transactional activities. Account statements can also be essential in recognition of fraudulent financial activities. If you check your bank statement on regular occasions, suspicious activity is very noticeable. The account owner should immediately notify the bank if any is noticed.
  4. To determine the interest earned. You can use the bank statement to analyze the amount of interest earned on your deposit account. Account owners may utilize this date to make a comparison for the best interest rates of various financial firms for their businesses. They may use this data to assess the potential benefits of switching savings accounts or making other investments that will enable them to gain more profits.
  5. Keeping track of your Account Balance. Account statements provide a clear depiction of financial standings to the respective account owners at a given time. Through regular monitoring of the account balances, overdraft costs can be prevented, and ensuring that there is an adequate amount of money to cover all transactional activities.
  6. Error and discrepancies detection. Banks are prone to mistakes from time to time, even though they are rare, because banks usually have a strong system to monitor and document transactions. This is why it is essential for account owners to thoroughly review statements and notify the banks immediately in case there is any inconsistency.

Benefits of bank statements

Account holders should double-check for inconsistencies when reconciling their bank account with the bank statement. Any anomalies in a user's account must be reported in writing immediately. A financial institution statement is sometimes known as a statement of account. It demonstrates the bank's responsibility for the customer's funds.

Account holders may make better use of their money management skills with the assistance of their bank statements. They are useful for keeping tabs on money, spotting mistakes, and establishing spending patterns. Daily, weekly, or monthly account verifications are recommended to guarantee that a customer's records are in sync with those kept by their financial institution. This aids in the prevention of overdraft charges, mistakes, and fraud.

Any inconsistencies must be reported immediately to the bank. In most cases, customers have 60 days from the statement date to appeal any discrepancies. Monthly statements must be kept for a minimum of 12 months.

Safeguarding Your Financial Statements

Bank statements include personal information that might be used by fraudsters and identity thieves. That's why protecting your financial records is so crucial. Keeping your bank statements safe may be done by following these steps:

  • Don't throw away your bank statements until you've shredded them. Make sure sensitive information is hidden.
  • Please don't take your bank statements out in public unless absolutely essential. Don't leave them lying about the house or the workplace.
  • If someone contacts you by email, text, or phone seeking sensitive information, hang up immediately.
  • Keep your account number private and only share it with reputable organizations.
  • Never give out sensitive information in response to a link in an unsolicited email, text message, or pop-up window. Typically, they are attempts at phishing.
  • You should check your account activity often for any suspicious or unauthorized activities.

Conditions for a Bank Statement 

The bank statement includes data about the financial firm, such as the bank's name and address and your personal information. It also contains information on; the account, the account's opening and closing balances, the statement date, and the account holder. Pertinent information such as the date, amount, and payee are usually on the bank statement. All transactions made, withdrawals, service fees charged, written and cashed cheques, and deposits are also itemized on the account statement.

How can I access my bank Statement?

Account holders can generally obtain their most recent account statements online through their bank's websites or mobile apps. Additionally, you can always ask the bank to send you a hard copy paper statement monthly via mail.

Bank statement vs. transaction history

A transaction history is documentation that depicts a general record of your account's transactional activities over a specific period of time, whereas a bank statement contains a record of every transaction that took place for a bank account over a given period. A bank statement usually covers a month, and recent or pending transactions may not be included.

Can anyone access my Bank Statement?

It is impossible for someone to access your bank statement unless you disclose information about your bank account since financial institutions do not give out data to any unauthorized third parties without first asking you.


A bank statement is documentation of the financial transactions between the bank and its account holder during a certain time frame. Checking account statements may be utilized for budgeting purposes, identifying areas where costs can be reduced, and detecting fraudulent or illegal purchases. Your preferred method of receiving your monthly bank statements will be requested of you upon account opening. There are two delivery options available to you: online and regular mail. Bank statements include sensitive information that may be used by identity thieves and fraudsters, so it's crucial to keep them safe. Shredding your bank statements before discarding them is one approach to keep your financial information safe, and you should also avoid providing this data in response to unwanted inquiries. Be aware of your bank's fraud regulations and keep a close eye on your account activities. Having a record of your financial transactions in the form of a bank statement is essential for maintaining financial privacy.