checking

Anatomy of a bank account statement

Your monthly bank account statement gives you a detailed review of the activity in your account for a specific period of time. It's your best opportunity to make sure your records match the bank's.

Check the statement

When your statement arrives, look near the top of it for the starting and ending dates -- the period the statement covers. Get your checkbook register and be prepared to match up every debit and credit on the statement with your register.

It's crucial that you review it in a timely fashion because if there are any discrepancies you need to report them to the bank. For questions about ATM, debit cards, point-of-sale debit transactions and other electronic banking transactions that involve cash being withdrawn from your account, you have 60 days from the date of the periodic statement to report it to the bank or the bank has no obligation to conduct an investigation.

Discrepancies with paper checks don't have those time restraints, but you should get them resolved speedily too. Another important reason to reconcile your checkbook with the statement is to look for debits you didn't make that might indicate an identity thief has gotten access to your account.

Summary is important

Most statements show a summary near the top of the first page. It condenses the status of your account: the beginning and ending balances for the statement period, total deposits, total withdrawals, service fees, etc.

The summary gives you a good idea of whether venturing further into your account is going to be a walk in the park or a walk on the wild side. For example, if you think you have $800 in your account and the summary shows $250, you may have a problem.

Maybe a deposit hasn't been credited yet, or maybe the bank made an error. More often it goes the other way -- the balance is higher than what is in your checkbook register because you've written checks beyond the period covered in the statement. The summary will at least warn you to pay close attention as you review the statement.

Transaction description

A prominent section of the statement is the transaction description. It details account activity -- deposits, withdrawals and fees.

Do you know what type of account you have? Make sure the bank does, too. Each statement should prominently display the type of account you have -- such as free checking or an interest-bearing account, etc.

An interest-bearing checking account earns interest, but might require maintaining a hefty minimum balance. A free account generally doesn't pay interest, but it also doesn't require a minimum balance. If you initially signed up for an interest-bearing account but now realize the interest earned isn't worth maintaining that balance, tell the bank you want to switch.

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