United Arab Emirates: What should you pay attention to in your monthly bank statements?

A bank statement is a document that shows how much money has been credited to and debited from a bank account over a period of a month or quarter. It’s a snapshot of your banking activity and a useful tool for understanding your finances.

Taking the time to review your statement means you can spot problems that might otherwise go unnoticed, such as hidden charges. Find out how to read a bank statement and why you should review yours every month.

What’s on a bank statement?

Although you will see some differences in presentation between different banks, most bank statements include the following information:

  • Account Activity: This section details all transactions made during the statement period, such as purchases, deposits and withdrawals, in chronological order.
  • Account Balance: This is the amount of money in the account on the closing date
  • Account number: It identifies the bank account
  • Account Summary: This provides an overview of the account, including opening and closing balances, deposits, withdrawals, and fees.
  • Account type: identifies the type of account, such as salary or current, savings or investment
  • Bank contact details: this includes the postal address, telephone numbers and details of the bank’s customer service website.
  • Credits: this is the money credited to the account during the statement period
  • Debits: This is money withdrawn from the account during the statement period, such as debit card purchases, checks, and bill payments.
  • Statement Date: The date that marks the end of the statement period is usually located at the top of the document.
  • Total Fees: This is the fee charged to the account during the statement period
  • Transaction Date: This is the date the transaction was processed
  • Your details: Make sure to check that the details to contact you are correct, in order to report any errors to the bank

How do you reconcile your bank statement?

Reconciling your bank statement serves several purposes. First, it helps you verify all your banking transactions, making sure there are no errors. This is also the time to make sure you haven’t missed a payment or paid someone twice. And you can track any uncashed checks or NSF payments from the previous month.

Reconciling your statement also gives you insight into your finances and how you spend your money. This can lead to better money management, especially at a time when the crisis has hit finances and personal spending.

Here are some quick and brief tips to follow when reconciling your bank statement:

  • Check your bank statement against other documents: it could be a written journal and receipts, budgeting software or an app.
  • Check balance: Make sure the opening balance on your bank statement matches your statements. If not, find out why and fix the problem.
  • Check deposits: Review the deposits shown on your bank statement to make sure they match your records.
  • Check withdrawals: Check your withdrawals the same way you checked deposits.
  • Reconcile your accounts: If something is wrong, try to resolve the problem by adjusting your own records or correcting bank errors. The goal is for your final statement balance to match your statements each month.

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How to find and fix errors on your bank statement

It may not happen often, but finding an error on your bank statement can be frustrating, especially if you’re diligent about reconciling your account. If you encounter an error, work quickly to resolve the issue with your bank.

Here are some steps you can take to correct errors on a bank statement:

Check the error: If you come across an error, take the time to verify that it is indeed an error. Set aside any evidence of error if possible. You will need it when you contact your bank.

Contact your bank: Contact your bank to inform them of the error. Depending on the financial institution, you can do this by calling the bank’s customer service department, by sending a secure message through your online banking account, or by email. Submit any evidence of the error at this time. If you contact your bank by phone, let them know you have proof of the error and ask them for the best way to send it.

Contact the third party: If the error involves another party, take the time to inform them of the error, in case it affects the records on their end as well. They may be able to help you resolve the error faster than you can on your own or if you contact your bank.

Adjust your recordings: Once the error has been corrected, make the necessary adjustments in your own records. It’s a good idea to keep records of your correspondence with your bank or a third party, in case problems arise later. Record the names of the people you speak with, as well as the date and time.

Why is it important to read your bank statement?

Your bank statement provides insight into your financial habits. It lets you find out where your money is going and where you could save money. Your bank statement also provides details of the charges you have been charged and allows you to investigate accounting errors and fraudulent charges. Learning to read your bank statement isn’t as difficult as you might think. Once you know what you are looking for, you will feel much better about your finances.

How often do you check your bank accounts?

If you’re wondering how often you should check your checking account, know that it’s impossible to check your bank account too often. Some people think checking their bank account once a month is enough, but financial planners suggest that monthly checks aren’t really enough to keep you on top of your spending or help catch fraud in a timely manner. It is best to check your bank accounts at least once a week.

If you live paycheck to paycheck, or in other words, if you use most or all of your monthly income to cover your monthly expenses – with no money left over and no savings, or if you try to control your expenses, you’ll want to check your accounts even more frequently. This is also true for those who receive irregular income from multiple sources (such as freelancers or freelancers), who might need to monitor their income more closely. Subject matter experts continue to recommend that checking your bank accounts should ideally be a daily habit or at most a weekly habit.

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Monitoring of bank balance statements
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Summary of advice to follow

Here is a summarized step-by-step tip sheet for reading your bank statement without overlooking any important charges:

Start with the account summary: Somewhere near the top of your statement there will likely be an area that provides an overview of the past month’s activity. This includes opening balance, closing balance, deposits, withdrawals, checks and fees. A quick glance at this will give you a good idea of ​​what you’ve been up to over the past month and whether or not there are any issues you may need to look into.

Know the type of declaration you are viewing: Although the format may be the same, the information on a salary or checking account bank statement will be very different from that of a savings account. For example, your checking account probably has a lot more money coming in and going out, especially in the form of salaries. On the other hand, your savings account is probably where you store money that you don’t want to spend. On a savings statement, be sure to look for the line that shows the amount of interest you earned. Even if it’s just a little money, you want to be sure how much you’re earning.

Keep an eye on current bank charges: The goal is to find fees that you may be able to avoid in the future. For example, some banks charge monthly service fees if a certain amount of money is not kept in the account. If you don’t review every statement, you can make a mistake that leads to one of these charges repeatedly. Keep an eye out for overdraft fines, money transfer fees, ATM fees, or minimum account fees

Check for potential errors or clarifications: Although you may not find them very often, errors do occur from time to time. It is essential that you comb through every detail of your bank statement, looking for errors. You never know when you’ll be charged for something you didn’t buy or hit with unfair charges. If you don’t catch it on your bank statement, chances are it’s going unnoticed. If you find charges that you think are unjustified, be sure to call customer service and request that they be removed from your account.

Detect spending habits or financial habits: Since your bank statement includes all transactions made, it’s easy to see where your money is going and whether or not you’re making good decisions. This allows you to identify issues such as spending a lot at the start of the month, but running out towards the end. Templates like this should help you budget your money better. It should also show you how many times you took a trip to buy coffee, order food out, or buy clothes. Use your bank statement as a way to identify the expenses in your life that you need to reduce.

Additionally, it is often advisable to ideally compare three consecutive bank statements to see if there is a trend or if a month was just a fluke. Also, many of these same rules apply to analyzing a credit card statement if you have a credit card.