How to Read and Utilize Your Bank Statements Effectively

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Understanding Bank Statements: A Comprehensive Guide

At O1ne Mortgage, we believe that understanding your bank statements is crucial for managing your finances effectively. In this guide, we will walk you through what a bank statement is, how to read it, and how long you should keep them. For any mortgage service needs, feel free to call us at 213-732-3074. Our team is here to assist you!

What Is a Bank Statement?

A bank statement is a detailed summary of the financial activities in your bank account over a specific period. It includes your account’s starting and ending balances, along with a record of all transactions such as deposits, withdrawals, and fees. Reviewing your bank statement helps you ensure accuracy and detect any fraudulent activities.

How to Read Your Bank Statement

Bank statements may vary in format depending on your financial institution, but they generally contain similar information. Here’s a breakdown of what you’ll find:

Personal Information

Your bank statement will include your name, address, and phone number. Always verify this information to ensure it is correct. If you notice any discrepancies, contact your bank immediately to update your details.

Account Information

The statement will also show your account number and the name of your financial institution. Make sure this information is accurate. If you receive a statement for an account you don’t own, report it to your bank as it could indicate fraud.

Statement Period

The statement period indicates the date range for the transactions listed. For example, a statement period might be from April 1 to April 30. This helps you organize and keep track of your statements.

Starting and Ending Balance

Your statement will show the beginning and ending balances for the period. This helps you track your income and expenses, identify spending trends, and refine your budget. Some banks also provide your average daily balance.

Account Activity

All transactions during the statement period are listed in chronological order. This includes deposits, withdrawals, debits, fees, and any interest earned. Review these transactions carefully to ensure they match your records and report any suspicious activity to your bank.

How Long to Keep Bank Statements

It’s generally recommended to keep bank statements until you’ve filed your taxes for that year. If you use them for tax calculations, keep them for at least seven years in case the IRS has any questions. Digital statements can be downloaded and stored securely, while paper statements can be scanned or filed.

The Bottom Line

Bank statements are essential for monitoring your account, managing expenses, and budgeting. They are also useful for tax returns and credit applications. Keep copies of your statements for at least a year, and longer if needed for tax purposes. If you notice any suspicious activity, contact your bank immediately.

For any mortgage service needs, O1ne Mortgage is here to help. Call us at 213-732-3074 to speak with one of our experts today!

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