What is a Bank Statement and How Do I Read It?

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An account statement or a bank statement is a document that is issued by a bank that describes the activities carried out in the depositor’s savings account or current account during the course of time. The account holders can keep a track of their transactions and accounts through the bank statements.

Typically, a bank statement comprises details of your bank account activity from the last 30 business days.


The purpose of a bank statement is to summarise the transaction activities carried out during a particular time period. Since the bank does not own the money in the various accounts, it has to act in the capacity of a fiduciary and report the transactions and balances to the depositor or account holder.

Format of a bank statement

A bank statement usually has three components or parts:

  • Account holder details

This component of the bank statement is situated at the top. The name, registered address and mobile number are mentioned here.

  • Details of the account

After the details of the account holder, this section holds the account number details, home address, account description, that is, the type of account and other details related

  • Transaction history

This part of the bank statement shows all the transactions recorded with the date, amount and description of the payer and payee

The bank account holder has the freedom to choose the statement period for which he or she wants the bank statement.

Reading a Bank statement

In order to read a bank statement properly and effectively, you need to first understand each detail clearly.

  • Statement cycle

The important thing is to look for in the bank statement is the ‘for a period of’ or ‘statement ending’ date, indicating the date range of the bank statement covers

  • Your information

The account holder’s name, current mailing address, and bank account number will also be presented on the bank statement. With this information, the account holder can verify the correct bank statement is issued or not.

  • Bank information

The bank statement should also comprise identifying information about the account holder’s bank transactions. This information includes the name of the bank, phone number, website, and other important information.

  • Account activity

A detailed breakdown of every bank transaction that has taken place over the specified period is illustrated in this section. Any cash that came out of the account like any authorised payment or withdrawal and purchases is shown under debit or withdrawal.

In the same way, deposits made, payments that went into the bank account and credits are shown under credit or deposit

  • Account summary

On the bank statement, the account summary is also provided. It will indicate the starting balance, total amounts of addition and withdrawals and lastly, the ending account balance.

  • Date of transaction

Some transactions on the bank statement might reflect a minor delay since some purchases like big payments may not have been posted on the exact same day. Instead, the transaction date indicates the date on which the bank actually processes the transaction.

  • Debit and credit

Credits are funds that enter the bank account whereas debits are funds that exit the bank account.

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