Bank statements are important in monitoring your account activities but it is often overlooked due to how they can easily be generated. However, in a time of cyber crimes and fraudulent activities by individuals and certain institutions, it is imperative to keep watch over your bank activities to spot any irregularities.
First, what is a bank statement? According to the Oxford Language dictionary, a Bank statement is a printed record of the balance in a bank account and the amounts that have been paid into it and withdrawn from it, issued periodically to the holder of the account. It also includes a list of all transactions for a bank account over a set period, usually monthly. The statement includes deposits, charges, withdrawals, as well as the beginning and ending balance for the period.
There are a bunch of valid reasons to keep a close eye on your banking activity, particularly if you’re concerned about preventing fraud or minimizing fees. If you’re just getting started with your first checking account — Money moves in and out, so looking at your account can be helpful in several ways. Here are some of the things to keep in mind with your checking account.
Bank account fraud can cost you lots of money and major financial heartbreak. It’s becoming an increasingly significant problem for banks and consumers alike. Keeping an eye on your checking account regularly can help you spot potentially fraudulent activity and prevent financial losses before they happen. For example, an identity thief may obtain your debit card number and make a small test purchase hoping that you won’t notice. If the purchase goes through, the thief could then make larger purchases against your account.
That’s a huge problem because debit cards don’t have the same fraud protections as credit cards. If you report your debit card lost or stolen before anyone uses it, you’re not responsible for any fraudulent purchases. However, different rules apply once a fraudulent purchase occurs.
Watch for excessive or hidden fees
Banking fees can drain your balance, and monitoring your checking account can help you avoid triggering certain ones, such as overdraft fees and returned payment fees.So it pays to stay on top of your banking activity to make sure you’re not in danger of being hit with one. For example, say you deposit a check using a mobile check deposit. You assume the money will clear your account in one to two business days, so you pay your bills, buy groceries, and fill up on gas using your debit card. However, the check ends up taking five days to clear your account and, in the meantime, post all those transactions, putting your balance in the negative. Aside from overdraft fees, there are other banking fees to pay attention to, including, ATM fees (including surcharges from banks other than your own), card monthly maintenance fees, minimum balance fees etc.
So when monitoring your checking account, always look out for these and other fees your bank may be charging you. You can also track your balance, which can help you avoid putting your checking account into the red and racking up expensive overdraft fees.
Note, that some banks can charge you multiple overdraft fees in one day, with or without a limit; in some cases, the bank can add an excess overdraft fee once you incur a certain number of overdrafts.
Another thing to monitor your checking account is simply to improve your financial situation. If you are someone who loses track of their expenses or has a high spending habit then looking out for all the things t]you spent money on in a bank statement can help you to prioritize.
In case of an emergency being without extra funds could spell trouble for you. Monitoring your checking account can help you better identify where you can cut back expenses, so you can start saving money.
Provides a log of your income vs spending
Seeing the closing balance on your accounts at the end of your statement cycle can be a sobering experience if your spending habits are not aligned with your earning potential. Oftentimes, if your account balance is less than the average at the end of the month, it can be the wake-up call necessary to set a working budget. Reviewing your account statements regularly can also give you the insight necessary to take your mortgage to a more affordable lender. Seeing how much you spend on your home loan can be the catalyst to looking for a lower mortgage interest rate.
Apart from looking out for these things how often should you check your bank statements?
If you’re wondering how often you should monitor your checking account, know that it’s impossible to check your bank account too often.
Some people feel that checking their bank account once per month is enough, but monthly check-ins aren’t really enough to keep you conscious of your spending or help you catch fraud in a timely manner. It’s better to check your bank accounts at least once each week.
If you live paycheck to paycheck or are trying to reign in your spending, you’ll want to check your accounts even more frequently. This is also true for folks who receive irregular paychecks from multiple sources, (such as freelancers or the self-employed), who might need to monitor their income more closely. Try to make checking your bank accounts a daily habit.
Another question is if you indeed spot any fraudulent or suspicious activity how do you handle it?
Call your bank immediately if you notice suspicious activity. If you notice a charge to your account that’s unfamiliar or higher than what you agreed to pay, it’s imperative that you call your bank immediately to get it sorted out. If the charge is still pending, though, most banks will make you wait until it’s posted in order to dispute it. Keep in mind that some businesses will place holds on your account so if you see a pending charge for more than your bill, that could be why.