Five Things to Watch Out For in Your Bank Statements

Your bank statement is more than just a record of your financial transactions; it’s a valuable tool for managing your money effectively. It can help you keep track of your income, expenses, savings, and investments. However, it can also reveal some potential problems or errors that you need to be aware of and address as soon as possible.

Here are five things to watch out for in your bank statements:

1. Unauthorised Charges or Withdrawals

The most critical aspect to monitor in your bank statement is unauthorised charges or withdrawals. These may include transactions you did not initiate or approve, such as fraudulent purchases or ATM withdrawals. 

They can cause you to lose money, damage your credit score, and expose you to legal risks. Therefore, it’s important to check your bank statement regularly to catch unauthorised transactions as quickly as possible. 

If you notice any unauthorized charges or withdrawals on your bank statement, you should:

• Report them to your bank issuer immediately. Depending on the type of transaction, you may have different rights and responsibilities under the law. However, you need to act fast to limit your liability and prevent further losses.
• Follow up the dispute with a letter/email to your bank or card issuer. This will help you document your claim and protect your rights. Make sure to include your name, account number, date of the unauthorized transaction, amount of the unauthorized transaction, and any other relevant information. Send the letter to the official email address of your bank.

Read Also: Is Your Bank Savings Account Good Enough for You? 

2. Charges and Fees

Another thing you should look out for in your bank statement is the charges and fees associated with your account.

These are the expenses that your bank or card issuer charges you for various reasons, such as maintaining your account, covering overdrafts, using ATMs, making foreign transactions, paying late, or having an annual card. 

These charges and fees can reduce your account balance and affect your budget. Therefore, it’s important to check your bank statement regularly to catch any charges and fees that you may not be aware of or that you may be able to avoid. 

If you believe any charges or fees are unjustified or excessive, you should contact your bank or card issuer for clarification or to dispute them. 

You should also check your credit report to monitor for any accounts or charges that you don’t recognize. If you suspect identity theft, you should visit Huduma Center to report it and get a recovery plan. You can also place a fraud alert or a credit freeze on your credit reports to prevent new accounts from being opened in your name without your permission.

Here are some tips on how to deal with the charges and fees on your bank statement:

• Contact your bank or card issuer and ask for an explanation. Sometimes, charges or fees may be applied by mistake or due to a system error. In such cases, you may be able to get them waived or reversed by contacting the customer service department of your bank or card issuer.
• Review the terms and conditions of your account and card. Sometimes, charges or fees may be applied according to the contract that you signed when you opened your account or applied for your card. In such cases, you may not be able to get them waived or reversed, but you may be able to avoid them in the future by changing your account type, card type, or behavior. For example, you may be able to avoid maintenance fees by maintaining a minimum balance, overdraft fees by opting out of overdraft protection, ATM fees by using in-network ATMs, foreign transaction fees by using a card that does not charge them, late payment fees by paying on time, or annual fees by switching to a card that does not have them.
• Compare different banks and cards and consider switching if necessary. Sometimes, charges or fees may be applied because your bank or card issuer is not competitive with other providers in the market. In such cases, you may be able to save money by switching to a different bank or card that offers lower or no charges or fees for the same services. However, before you switch, make sure to compare all the features and benefits of different options and weigh the pros and cons carefully.

Read Also: How Customer Bank Deposits are Protected By the Government

3. Interest Earned or Paid Interest

You should also look out for interest earned or paid on your accounts.

This is the amount of money that your bank pays you for keeping your money in a savings account, fixed deposit account, money market account, or other interest-bearing account; or the amount of money that you pay to your bank for borrowing money from a loan account, credit card account, overdraft account, or other interest-charging account. 

Interest can affect your income and expenses and influence your financial goals. Therefore, it’s important to check your bank statement regularly to track how much interest you are earning or paying and see if they align with your account agreements and expectations. 

If you notice any interest earned or paid on your bank statement that you want to optimize, you should:

• Compare different interest rates and consider switching if necessary

Sometimes, interest rates may change due to market conditions, inflation, monetary policy, competition, or other factors. 

In such cases, you may be able to earn more interest by switching to a different interest-bearing account that offers higher interest rates; or pay less interest by switching to a different loan account, or other interest-charging account that offers lower interest rates. 

However, before you switch, make sure to compare all the features and benefits of different options and weigh the pros and cons carefully.

• Increase or decrease your account balance and adjust your payment behavior.

Sometimes, interest rates may depend on your account balance or your payment behavior. 

In such cases, you may be able to earn more interest by increasing your account balance in your savings account or other interest-bearing account; or pay less interest by decreasing your account balance in your loan account or other interest-charging account. 

You may also be able to pay less interest by paying more than the minimum amount due on your interest-charging account; or paying earlier than the due date on your loan account, credit card account, overdraft account, or other interest-charging account.

• Negotiate with your bank or card issuer and ask for a better deal. 

Sometimes, interest rates may be negotiable depending on your relationship with your bank or card issuer, your credit history, your account balance, your payment behavior, or other factors. 

In such cases, you may be able to earn more interest by asking for a higher interest rate on your interest-bearing account; or pay less interest by asking for a lower interest rate on your interest-charging account. 

However, before you negotiate, make sure to do your research and have a realistic expectation of what you can get.

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4. Errors or Discrepancies

Bank statements are not infallible and can occasionally contain errors. These errors may include wrong category, double-charged transactions, wrong amount, incorrect dates, or discrepancies in your account balance. 

Errors or discrepancies can cause you to lose money, pay unnecessary fees, and damage your credit score. Therefore, it is important to check your bank statement regularly and reconcile it with your own records to identify and correct any errors or discrepancies as soon as possible.

Timely action is essential to prevent these errors from causing further financial complications.

If you notice any errors or discrepancies on your bank statement, you should:

• Contact your bank: If you discover any discrepancies or errors, contact your bank promptly. Most banks have dedicated customer service channels to assist with resolving these issues. Be prepared to provide details, such as the transaction date, amount, and a description of the problem. 
• Documentation: Maintain a record of your communications with the bank regarding discrepancies, including dates and names of bank representatives you spoke with. This documentation can be essential if the issue persists and escalates. 
• Dispute resolution: In cases where the bank does not promptly resolve the error, you may need to initiate a formal dispute. Follow your bank’s dispute resolution process, which typically involves submitting a written complaint and supporting documentation. 
• Monitor the resolution: After reporting the error, keep a close eye on your subsequent bank statements to ensure that the issue has been corrected and that you have been reimbursed for any financial losses or fees incurred due to the discrepancy. 

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5. Budget and Goals

Your bank statement can be a valuable tool for monitoring your progress toward financial goals and budgeting. 

Compare your income and expenses to your budgeted amounts to ensure you’re staying on track. If you notice any deviations, consider adjusting your spending habits or financial goals accordingly. 

Regularly assessing your bank statement in the context of your financial objectives can help you make informed decisions about your finances.

Read Also: 10 Warning Signs You Are Living Beyond Your Means

5 Tips for Effective Bank Statement Review

To make the most of your bank statement review, here are some tips that you can follow:

1. Review your bank statements regularly: Make it a habit to review your bank statements as soon as they become available, usually once a month or a quarter. This will help you catch any issues or errors early and take action promptly. 
2. Compare your bank statements with your own records: Cross-reference your bank statements with your own records, such as your checkbook, cash receipts, journal entries, or budget reports. This will help you verify the accuracy of both sets or records and identify any discrepancies. 
3. Take advantage of online access: Use online banking or mobile banking to access your bank statements anytime and anywhere. This will help you save time and paper and reduce the risk of losing or misplacing your physical bank statements.
4. Secure your physical bank statements: If you receive your bank statements by mail or print them out, make sure to store them in a safe and secure place. This will help you protect your personal and financial information from theft or misuse.
5. Educate yourself on your bank’s policies, fee structure, and dispute resolution procedures. Read the terms and conditions of your account and card carefully and understand your rights and responsibilities. This will help you avoid any surprises or misunderstandings and resolve any issues or disputes effectively.

Read Also: Critical Dos and Don’ts of Managing Your Money

Wrapping Up

To sum up, your bank statement is a powerful tool for managing your money effectively. By checking it regularly, you can identify and fix any issues that may impact your finances, such as unauthorized transactions, fees, interest rates, or errors. You can also track your cash flow and measure your progress towards your financial goals. Reviewing your bank statement is a smart financial habit that can help you stay on top of your finances and secure your financial future.