This archive report was first published on 14 November 2019.
Understanding Bank Statements ¶
Published on November 14, 2019
Bank statements are documents sent by your bank to account holders, summarizing all transactions done over a set period, usually monthly. These statements contain essential information such as account number, account name, and a detailed list of deposits, charges, withdrawals, and the beginning and ending balance of the period.
With bank statements, you can access your account information and track your finances. You can receive your statements electronically via email, known as e-statements, or paper statements via mail. The choice of how you receive your statements lies with you, and each option has its benefits. E-statements can be accessed from anywhere at your convenience, while paper statements can help prevent accidental deletion, a common issue with spam emails.
Does your banking activity affect your bank statements? Yes, it does. Bank statements summarize transactions in your bank account, and therefore, transactions done from your account will be reflected in your statements. The credit column records all the incomes to your bank account, while expenses and withdrawals are recorded in the debit column. Your bank charges, such as excise duty, ATM withdrawal charges, and M-Pesa charges, will be recorded in the debit column.
Account holders can use bank statements to check for discrepancies in their account and keep track of their money. By analyzing your bank statement, you can reduce errors and cases of fraud and identify your money habits, such as spending and income. You can also use your bank statement to apply for loans, as lenders may request it to gauge your ability to repay and service your loans.
It's essential to have a positive outlook on your bank statement by ensuring there is activity in your bank account. Withdrawing all your money from your account and having it in cash will leave your account looking dormant, which may negatively impact your loan applications. You can boost the positive outlook by ensuring your expenses are in line with your incomes, which can be achieved by tracking your spending habits.
In conclusion, understanding your bank statement is an essential part of managing your finances. Ignoring your statements is not wise, so start looking at your bank statement and consider subscribing to receive your statements if you haven't already.
