Understanding how an account statement works can help you better manage your money and spot potentially fraudulent activity. Learn what’s on an account statement and how you can use the information to make better financial decisions for your situation.
Definition and Examples of an Account Statement
An account statement is a document that summarizes all your account activity for a specific timeframe.
Alternate name: Statement of account, bank statement, billing statement
The “activity” listed on your account statement varies depending on the type of financial account. For example:
Bank account statement: includes a list of deposits, withdrawals, transfers, fees, and interest earned for the month. Credit card account statement: summarizes your purchases, minimum payment, interest charges, balance transfers, cash advances, and your credit score. Brokerage account statement: typically includes a summary of your portfolio value, dividends, capital gains distributions, and earned interest, along with a breakdown of all the securities you hold.
Most financial institutions send out account statements on a monthly basis. However, they may send them out quarterly if you haven’t had account activity in a while.
How an Account Statement Works
When you make a transaction in your financial account, it gets recorded on your account statement. This could be for a transaction like withdrawing cash from an ATM, making a purchase with your credit card, or paying your car loan. For example, let’s say you have a checking account and you made the following transactions over the course of one month:
Jan. 1: Deposited $1,500 into your accountJan. 5: Paid $75 for gas with your debit cardJan. 7: Paid your rent with a check for $1,000Jan. 10: Paid $50 for groceries with your debit cardJan. 12: Paid your credit card bill for $100Jan. 15: Transferred $200 to your savings accountJan. 30: Paid your auto loan bill for $285
Your account statement would show all of these transactions, along with the running balance in your account after each one.
Account Statement Example
Say you have a checking account with Wells Fargo. Here’s an example of what your checking account statement may look like: ACCOUNT SUMMARY Account Number: 123456789 Statement Period: Jan. 1 to Jan. 31 Beginning Balance on Jan. 1: $1,000.00 Credits/Deposits: $3,000.00 Debits/Withdrawals: $2,500.00 Ending Balance: $1,500.00
Benefits of an Account Statement
Account statements are beneficial for two reasons: they help you manage your finances and they help you spot fraudulent activity.
Manage Your Finances
First and foremost, account statements help you manage your finances. By detailing all of your transactions in one place, you can:
Keep an eye on your spendingTrack how much interest you’ve earned or accruedKeep up with your total balance
For example, say you’re learning how to budget and are trying to decide how much you should allocate in your dining out category. You could look at previous account statements to see how much you spend each month on average.
Spot Fraudulent Activity
Account statements are also a great way to spot fraudulent activity on your account. For example, if you see an unauthorized transaction for $50, it could be a sign your account has been compromised. By catching it early, you can dispute it with your bank and work with them to resolve the issue.
An account statement is a document that shows all the transactions made in an account for a given time period. Account statements can be received either electronically or by mail. You should receive an account statement for all financial accounts you have, including bank accounts, brokerage accounts, credit cards, loans, peer-to-peer payment apps, and more.Account statements can be a helpful tool for managing your finances and spotting fraudulent activity.
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