Understanding bank statements

08/01/2007

         

A cheque or current account bank statement records when and for how much you:

• issued cheques;
• withdrew money from a cash machine; or
• paid your bills with standing orders or direct debits.

It also records any payments into your account. These payments might include salary credits or benefits payments, cash or cheques (paid in over the counter at a branch, by post or through an express deposit machine).

Why does the bank send me a bank statement?

A statement lets you know exactly what has been happening in your bank account and lets you check that the bank has correctly recorded your transactions.

The statement gives you a chance to query anything that you think is wrong. It is an important part of being responsible for your financial affairs to keep on top of what is happening in your account, and your bank statement is the main tool to use.

How often does the bank send me a statement?

The routine for automatic sending of statements varies from bank to bank. Statements can be sent regularly every month or quarter, or twice yearly, or whenever a full statement page of transactions accumulates.

If you urgently require a bank statement you can order one. There is likely to be a small charge deducted from your account for this service, because it has to be done especially for you rather than as a matter of routine.

If you have already received a statement but then require another copy, banks will usually make a charge for this.

If you have a type of account accessible by card and you have one, statements will be sent to you at least every quarter (unless it is an account operated by using a passbook). You can request a current statement when using some ATMs or cash machines, which may be produced by the machine then and there, or it will be sent to you by post.

What information is shown on a statement?

Banks set out their statements in different ways. Do read your own bank statements to identify what codes or abbreviations are used to denote particular types of transactions, such as:

• direct debits;
• standing orders;
• cash machine/ATM withdrawals;
• counter credits and debits.

There are no standard codes used; your bank will have devised its own.

Cheques are often identified only by their numbers, so it is vital that you make a note in your cheque book on the stub by each cheque to whom it is being issued, for what sum and when you wrote the cheque.

What should I do when I receive my bank statement?

First: Set aside some time to look at your statement properly – not just a casual glance. Sit down with:

• the statement, and a pencil and paper;
• your cheque book;
• receipts for any debit card transactions;
• your paying-in book (if you use one), or the stubs or receipts from the bank branch¡¦s paying-in slips;
• any documents which show credits to your account (such as payslips, benefits statements or dividends);
• your previous bank statement.

Next: Read your statement and:

• tick off all the cheques from your cheque book which appear on the statement;
• do the same for any credits paid in and debit card items;
• check that all your regular standing orders and direct debits are shown properly on the statement;
• check that the running total which you should keep in your cheque book on the stubs
• agrees with the last balance on the statement;
• note outstanding items: some items might not yet have appeared on your latest statement. For example:

• recently issued cheques may not yet have been received by the bank;
• recent credits might not yet have cleared with the bank;

make sure that outstanding items from your last statement appear on this new statement.

What other information is there on the statement?

You may find that the bank has made deductions from your account to pay for services which you have used during the statement period. Your bank will notify you in advance of any charges which will be made for services such as overdrafts and safety deposit boxes. Check that the sums match what you were expecting.

It is useful to keep a record of any regular deductions with your bank statements, and it is also useful to keep the latest list of tariffs sent by the bank, so you know what rates and charges are being applied.

What happens if I disagree with what is on the statement?

If you believe an error has been made, contact your branch as soon as possible; this is best done in writing, and you should keep a copy of your letter.

Don't send back the original bank statement; make a copy if you want to point something out to them.

The bank will investigate. If an error has occurred which is their fault, then they should correct it. If their error has resulted in bank charges being made or other deductions from your account, they should make good the mistake and re-credit the sums involved.

If you are unhappy with their reply, then you should arrange an appointment to see someone in the branch or direct bank to discuss the problem.

If that conversation does not resolve the problem, you may want to consider making a complaint, a subject which is covered in the section on 'How to Complain to Your Bank'.

Related Links

Complaining to/about your bank (Internal Link)