Check Your Bank Account Statement for These 6 Red Flags

bank account statement

Your bank account is the hub of your financial world. It’s where most of your money comes in, and where most of it goes out. And it’s all reported on your monthly bank account statement.

Checking bank account statements is pretty straightforward. Many banks will mail paper statements or email digital statements once a month. When these documents show up, don’t ignore them. Take a moment to review your statements and ensure everything checks out.

When something goes wrong with your finances, your bank account statement is where you might see the first red flags, from bank errors to fraud. Here are six red flags to look for on your monthly bank account statements.

6 red flags on your bank account statement

1. Low account balance

The first thing you’ll want to check is that your account balance matches your expectations. Your balance will be a result of the total of the various transactions on your account — money you took out as well as funds you deposited.

If your balance doesn’t look right, that’s a big, red flag. You’ll want to review your transactions and deposits to find the discrepancy.

Make sure your balance is high enough to cover upcoming expenses as well, especially automatic payments. Checking for this will let you know if you need to transfer some money over from savings to cover your bills and avoid an overdraft.

Lastly, you’ll want to ensure that you’re maintaining a sufficient balance to avoid any monthly fees or charges. Many checking and savings accounts charge a monthly maintenance fee, but this is often waived if you meet a minimum balance requirement. If you catch this low balance early, you can move some funds around and dodge the fee.

2. Missing or inaccurate deposits

Next, you’ll want to verify all deposits made to the account. You want to track income you put into the account and ensure you’re actually getting the money you earned.

For regular paychecks, verify that the deposits are the usual amount you expect. If your pay varies between pay periods, keep your pay stubs and use them to cross-check deposit amounts on your account.

And if you deposit checks or cash by ATM or in a bank branch, always get a receipt. This ensures you can prove you made a deposit, and how much it was. Locate ATM and in-branch deposits on your bank account statement and make sure the amounts match what’s on these receipts.

3. Potentially fraudulent charges

Next, review your transactions to ensure that you recognize each one. Watch for vendor names you’re unfamiliar with or purchases you don’t remember making. This is one of the best ways to protect yourself from identity thefts and fraudsters.

Don’t just watch for big-ticket items, either. Pay attention to small transfers, which thieves might use to “test” card numbers and see if they are valid.

If you find a transaction you don’t recognize, double-check receipts to see if you can figure it out. Sometimes it’s a simple case of a mismatch between the vendor ID on your account statement and the storefront name. But if you do find a transaction you don’t recognize, contact your bank immediately to alert them to potential fraud on your account.

Ideally, you should check bank accounts on a daily basis to catch potentially fraudulent charges early. Otherwise you might be liable for the fraudulent charges. According to Consumer Reports,

Federal law limits your liability for fraudulent debit-card charges to $50, but only if you report the theft or loss of your card or PIN within two business days of discovering the problem.

4. Transaction errors

Banks also can make mistakes. Your deposit might be wrong because the bank transposed two numbers on the check amount. A bank might even accidentally deposit someone else’s check into your account.

Watching for these errors will help you identify and resolve them quickly so there are no hiccups in accessing your funds.

5. Bank fees

Next, identify any bank fees charged to your account, such as monthly maintenance fees or overdraft charges. These costs eat into your funds and are easy to avoid.

If you incur a fee that you rarely pay, such as a fee for an overdraft, call your bank and try to get it reversed. I’ve had maintenance and overdraft fees waived simply by asking nicely.

If you keep seeing the same fees in your account statements, it might be time to try a new tactic. Try switching to a no-fee checking account or setting up balance alerts to avoid overdrafts.

6. Missed or late bill payments

Lastly, you should verify automatic bill payments to ensure they went out on time and were for the correct amount. Check the payment amounts and dates against your bill statements.

Make sure all your credit card and debt payments are listed. Keeping up with payments is crucial to maintaining and building credit. You’ll also usually get hit with a fee for making late payments. Thus, you’ll want to ensure your bank account shows all sent payments.

Keeping up with your monthly bank account may seem like a hassle. In reality, it’s a task that takes no more than 15 minutes and is vital to your financial health.

Not only will you be able to catch and resolve issues with your bank account, but you’ll also get a snapshot of your financial health. And you might even discover new strategies and ideas for how to do more with your money.

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