Understanding bank statements and your balance

BANKING ESSENTIALS

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This lesson will cover what bank statements are and how to understand them.

We’ll also look at how to check your balance, what an overdraft is and how to use one.

Chapter 1 - Your bank statement

What's on a bank statement?

Here's an example of a bank statement, with the type of information you're likely to find on one:

Example bank statement for the period 1st July through to 31st July. At the start of the statement period, the balance is £505.91. After the first transaction, the balance is £868.85. Multiple transactions in and out are listed. The balance at the end of the statement period is £601.25.

Now, let's look at this information to see what it means.

Select each item to find out more.

Personal information expandable section

This includes your bank account number and sort code, plus your full name and address.
Balance expandable section

The statement shows the balance in your account at both the start and end of the statement period.
The time period covered by the statement expandable section

This is usually one month. However, statements don't always start at the beginning of the month. For example, your statement could run from the 13th of the month to the 12th of the next month.
Money in expandable section

This shows the money coming into your account. It includes cash deposits, cheques, money transfers sent to you, refunds and interest earned.
Money out expandable section

All the money taken out from your account is also shown. This includes any spending, transfers that you've sent, cash machine withdrawals, automatic payments and bank fees.

Looking at our example bank statement, what is the balance at the end of the statement period?

A - £505.91

B - £601.25

C - £868.85

Introduction - Understanding bank statements

Chapter 2 - Checking your balance online

Mary checks her balance online

Use the arrows to follow Mary as she views her account details.

Chapter 1 - Your bank statement

Chapter 3 - Overdrafts

What is an overdraft?

If there's a minus sign by your available balance, it means you are in an overdraft.

An arranged overdraft can act as a short-term safety net. You can use it to borrow money up to an agreed limit through your bank account – this is called your overdraft limit.

An unarranged overdraft is when you have had more money come out of your account than the limit you had agreed with your bank first.

How do overdrafts work?

After looking at her balance, Mary is confused by the overdraft section.

She decides to text her daughter, Pam.

Use the arrows to find out how Pam explains overdrafts to her mum.