Here’s how to tell if you need a dedicated business account for your side job.
What is a statement?
A statement is a document sent by your bank that records all transactions on your account between two specified dates, usually over a period of one month. The statement shows all transactions that occurred and which were recorded by the bank during that period.
Statements represent a formal record of all transactions on a bank account. These include:
- Salary deposits.
- Cash deposits.
- Check payments.
- Debit card payments.
- Cash withdrawals.
- Service charges.
- Direct debits.
The statement usually, but not always, covers a period of one month. The statement will start with an opening balance, list all transactions chronologically and end with a closing balance. This represents the current balance of your account, as reflected on the bank’s books on the closing date.
Not every transaction made during that period may appear because of inherent delays that occur. For example, if you posted a check in the mail, the amount will only be debited from your account when that check is deposited into the payee’s bank account and is cleared.
When you receive your statement, you should check it against the transactions you have made. If there are any discrepancies, contact your bank as quickly as possible, especially if money has been withdrawn from your account. Also look out for unexpected fees and challenge them if they aren’t right.
Although you can receive statements in the post, many banks have switched to electronic statements. This has the advantage of receiving your statement earlier, and it saves paper. However, it’s essential you open the statement, verify it and save or print it.
Stephanie has a checking account with her local credit union. Recently, she switched to online banking because the advertised fees were lower. When she receives her statement, she notices she has been charged substantial transaction fees on four occasions in the last month. She contacts her bank who informs her these were teller fees from over-the-counter cash deposits after being paid at her part-time job. The bank advises her to use the auto teller cash deposit facility, which is cheaper.
Are you concerned your bank fees are too high? Use Bankrate’s savings and checking account comparison to find the account with the lowest charges.