7.4 What are bank statements

Basically, a bank statement shows totals of your deposits and withdrawals/debits/cheques within the last month. It starts with the balance at the beginning of the month, adds the total deposits, subtracts the total withdrawals, and gives you a summary balance as of the date of the statement.

Why should you keep them

It is important to go over the deposits and the cheques on your statement to ensure that it matches with your records. Furthermore, it gives you peace of mind that your account balance is what you expected. You are legally required to keep statements for seven years, however don't worry if you don't as your bank can provide a copy for a fee.

You'll be glad you closely followed your account's paper trail if you find yourself in a situation where for example your account might be overdrawn. In some instances the bank might have made a mistake but by paying attention to your bank statement you can report issues quickly which will mean:

• they're likely to be fixed quickly and not escalate.
• also it's easier to track things when they just happened versus six months ago.

And by being prompt in your account reconciliation, you show the bank that you are trying to stay on top of your finances. That diligence could later pay off.

Also keep tabs on your account between statements. Periodic checking on your account between printed statements does sometimes make sense. This can also be done using Internet Banking,Phone Banking or ATM printouts.

Most of these tips don't take much time. And once they become a part of your financial routine, you'll find it's easy maintaining a healthy cheque account.