What is a bank statement? What are the types and purpose of bank statements?

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Before the era of digitization, bank statements were produced periodically on paper on a monthly, quarterly or annual basis. After the introduction of computers in banking, bank statements were generated monthly. Financial institutions are required to generate paper bank statements for their customers unless the customer specifies electronic statements or no statement at all. Bank statements are also mailed to the respective residential address of the clients.

In the late 1990s, electronic bank statements were introduced, which also helped financial institutions save the cost of printing statements. The digitization of the banking sector has led to providing online banking products and services that are accessible to customers through online banking. However, to date, banks offer the customer the option of choosing whether he wants a paper statement or an electronic statement. Fast forward to 2022, RBI’s agenda for 2022-23 in banking is heavily digital.

Let’s understand the basics such as what is a bank statement? What is a bank statement used for? How do I get a bank statement?

What is a bank statement?

A bank statement is an official account statement provided by banks to account holders on a monthly basis. A statement is generated for a given period of time and is different for each account holder. Bank statements to help monitor cash flow, deposits, withdrawals and transfers, and also track fraudulent transactions.

A bank statement will include the customer’s personal details, banking information, statement period dates, account balance, transactions, fees charged and interest earned. In the personal information of the customer, one can find his name, his home address, his bank account number, the period of the beginning and the end of the statement. One can access the following transaction information from their bank statement including Check Deposits, Direct Deposits, Wire Transfers, Void Checks, Refunds, Credits, Credit Card Purchases, Card Purchases debit, ATM withdrawals, bill payments, bank charges and interest earned.

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Types of bank statements and how to access your bank statement?

Financial institutions offer two types of bank statements: (i) paper bank statements and (ii) electronic bank statements.

What is the content of a bank statement?

Paper statements are couriered to the customer’s residential address. The bank book is also provided by the bank which must be updated at the bank’s premises to access your transaction details. While electronic bank statement (also known as e-statements) can be viewed online through a bank’s official website if a customer has opted for internet banking.

What is a bank statement used for?

Bank statements help to:

  • Get insight into your account, transactions, spending habits, and more.
  • Used as address verification or proof of identity
  • Voucher to keep for audit and tax purposes

Bank statements are commonly used by the customer to monitor cash flow and check for possible fraudulent transactions. Bank statements should generally be retained for audit and tax purposes for a period set by the relevant tax authorities. Bank statements may also be used for address verification or proof of identity.

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