Skip to main content

Decoding Bank Statements

The mailbox of account holders at the end of each month or quarter, bank account statements hardly ever get a second look. Unless, of course, it is time to submit them to the chartered accountant for the annual income tax computation.

Most, unfortunately, give the document a cursory glance. And that, too, to check the balance. The fact is that it contains many more details.

Transactions like deposits, withdrawals, debit card purchases, cheques written and other monthly deductions from the account for paying other businesses — along with bank charges or fees — are included in the statement.

A bank account statement reveals the small charges that you pay as a customer for different transactions. Sometimes, they may add up to a substantial sum.

The account summary gives the basics — opening balance, amount credited, amount debited and closing balance. But that's not all.

Start with the basics (the top of the account statement): Customer ID and account number: These are unique numbers that belong to you. A single ID is assigned to you even if you hold more than one account with the bank. However, each account will have a different account number.

Account type: Whether it is a savings or a current account.

Account status: Actively-operated accounts are marked 'Regular'. No transaction for six months makes them dormant. To re-activate or make a transaction, the branch has to be contacted.

Overdraft facility: Based on the type of the account (current) or as against a fixed deposit, the overdraft amount is mentioned.

Nomination: The beneficiaries of your account, especially if held by a single person, are mentioned at the start of the statement. It is important to have a beneficiary as it is difficult to make claims in case of a mishap or the account holder's death.

Reading the details Look at the particulars or the narration part. This gives details of transactions, along with dates, withdrawals, deposits and the closing balance. If transactions are through cheques, cheque numbers are also given.

While describing a particular transaction, the nomenclature can be different for each bank. Some banks are more customer-friendly and explain abbreviations at the end. Others test your knowledge of cryptology ( see table ).

'CHQ DEP-MICR CLGCLEARI' is one way to describe a cheque deposited in your account. Some might even give details of the cheque issuer and the bank. For instance, the narration would read as, 'XYZ INDIA 55555 HDFC'. And your chartered accountant will be quite thankful for these details. In cases they do not give these details, you may have to keep a record to avoid confusion at the end of the year.

There are two more columns: The Auto sweep and the Reverse sweep. The Auto sweep facility allows a bank to convert funds from your account into a fixed deposit (FD). However, if there are insufficient funds for a cheque payment, the Reverse Auto sweep is initiated. Funds from FD are transferred to the account to make the payment. The interest on FD is calculated depending on the tenure chosen by you and how much and how soon (prematurely) the funds are withdrawn.

Reading them can be quite confusing. Here's some help...

accounts, banks could use the terms IB (internet banking) fund transfer and INF (internet fund transfer). NEFT (National Electronic Funds Transfer) to transfer between two banks and TPT in case of a third party transfer

RTGS (Real Time Gross Settlement): An electronic facility used for transacting cash over Rs 1 lakh

INW CLG: Indicates inward clearing done by the bank (when we issue a cheque)

EBA: For trading-related transactions by some banks

BIL: Bill payments through the internet

FI, SP: Bounced cheques due to insufficient funds. SP stands for stop payment

TIPS: Tips made at a restaurant, when paying through the credit card of the same bank, are deducted separately

INT: Your cash in the account (daily from April 1) earns interest

ATW (NWB/ATS or VAT/MAT/NFS): ATM withdrawals. When withdrawals occur at another bank's ATM, a few more abbreviations are added ( as shown in the bracket )

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

ICICI Prudential Value Fund Series I

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   Performance of the scheme will be benchmarked to the S&P BSE 500 index ICICI Prudential Value Fund is a closeended equity scheme. The scheme will have tenure of three years (1095 days) from the date of allotment of units. Units of the scheme will be fully redeemed at the end of the maturity period, unless rolled over. NFO PERIOD:   The NFO is open from October 18 to 28. The minimum subscription during the NFO period is Rs 5,000. SCHEME OBJECTIVE:   The scheme aims to provide long-term capital growth by investing in a well-diversified portfolio of equity and equity-related securities. INVESTMENT STRATEGY:     The fund proposes to invest in stocks that are trading at a huge discount in the BSE 500 index and plans to book profit and distribute dividen...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now