By: Alinda Ronnie Kyamureku
What Is a Bank Statement?
A bank statement is a periodic summary of the financial transactions on your bank account. It provides a detailed record of the money flowing in and out of your bank account during the billing period, typically a month. Your bank statement includes information about deposits, withdrawals, purchases, sales income (if a company account), fees, and interest earned, and displays the account’s beginning and ending balances. For a given billing month, the beginning balance shows the money on your bank account at the start of the month, while the ending balance reflects the money on your account on the last day of the month.
Types of Bank Statements
Bank statements come in various types, depending on the type of bank account one holds or the purpose of the bank statement:
❖ Deposit account statements: These are the most common type of bank statements and are provided to customers, including individual and businesses, for their savings or current accounts. Deposit account statements detail all transactions, including deposits, withdrawals, point-of-sale payments, and bank fees, over the billing period. Business account statements often include additional information relevant to business finances, such as payroll deductions, tax payments, overdraft facilities, and business loans received.
❖ Loan account statement: A loan statement shows the record of a borrower’s loan repayment activity for a given month. It is a summary of the progress of your loan that shows details such as the monthly repayment amount, your remaining principal balance, interest rate, late payment fees, and date by which you must make a repayment every month. Credit card statements are a form of loan account statement.
❖ Consolidated statements: Some banks offer consolidated statements for customers who hold multiple accounts with the same institution. These statements provide a unified view of all accounts, simplifying the tracking of finances.
❖ Investment account statements: With the introduction of Islamic banking in Uganda in September 2023, Mudarabah and Musharrakah investment account statements will be available for those customers. These statements detail transactions related to investments, dividends, and capital gains and losses.
❖ Certified statements: A certified bank statement is any of the above statements issued for official purposes. Certified bank statements are usually required for various official or legal purposes. This could include showing proof of funds (for example, for Visa applications), sources of income (business contracts), and ability to meet certain regular costs (for example, in the case of a divorce). To get a certified bank statement, you must request one from your bank. This will usually have to contain the bank’s letterhead on each page and bear the bank’s stamp and the signature of a bank branch senior employee. Since the bank authenticates certified statements, they usually come at a fee, so inquire about the process and associated costs.
Why Do You Need Bank Statements?
As previously mentioned, bank statements provide useful insights into a customer’s financial activity and therefore serve several crucial purposes:
❖ Monitoring transactions: Bank statements help you keep track of your financial activities, ensuring accuracy and detecting any unauthorized transactions on your accounts.
❖ Budgeting: They provide a comprehensive overview of your income and expenses, allowing you to create and stick to a budget. A statement enables you to identify where you spend most of your money, and conversely, the largest income generators, to inform your activities.
❖ Proof of transactions: Bank statements can serve as evidence of financial transactions, which can be useful for tax purposes or resolving disputes.
❖ Detecting errors: Regularly reviewing your bank statement enables you to identify errors or discrepancies in your account. These could be errors made by the bank or the individual or business.
How and Where to Get Bank Statements
Getting your bank statement is easy. Depending on the bank in which you hold an account, there are a variety of channels through which a customer can access their bank account statement.
❖ Online statements: Most banks now offer free online statements, also known as e-statements or electronic statements. These statements are accessible through the bank’s online banking portal or mobile banking application and are available for download and printing. Online statements have the advantage of being easily accessible at any time and are environmentally friendly by reducing paper waste.
❖ Paper statements: Banks traditionally used to mail paper statements to account holders’ postal addresses monthly. Paper statements provide a physical record of account activity and can be retained for reference, especially for accounting, audit, and taxation purposes.
❖ Email statements: Some banks offer customers the option to receive statements via electronic mail (email). Email statements are convenient for account holders who prefer electronic communication and want to reduce paper clutter.
The Cost of Obtaining Statements
Most banks offer one free bank statement per month. However, there might be fees associated with certain actions, such as requesting duplicate statements, requesting statements from previous months, or acquiring a certified statement. Review your bank’s fee schedule to understand any potential costs.
What if Something Doesn’t Add Up on my Bank Statement?
If you notice discrepancies or errors in your bank statement, it is important to address them promptly. Contact your bank’s customer service or visit a bank branch to report any issues with your account. Banks are generally committed to resolving discrepancies and ensuring the accuracy of your statements, so you should not hesitate to contact them to explain any transactions that do not align with your activities.
Conclusion
Your bank statement is a valuable financial document that empowers you to manage your finances effectively. By regularly accessing your statements through your most convenient channel and properly analysing them to understand and interpret the various transactions, you can monitor your income, expenses, and account costs with confidence. Whether you are a student, a young professional, or a business owner, this knowledge is essential for making informed financial decisions.
It is important to note that a bank statement is a confidential document, given the comprehensive details of one’s financial life. Therefore, it is advisable to safeguard the details of your bank statements, as hackers, identity thieves, and scammers can use this information to defraud you.
Finally, to explore specific account options, compare bank charges, or find more financial resources, visit Simply Mint’s bank charges comparison tables. We are dedicated to providing the information you need to make the most of your financial journey.