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

Axis Mutual Fund NFO - Axis Fixed Term Plan Series 18

Axis MF has announced that the NFO period of Axis Fixed Term Plan Series 18 (15 Months) under Axis Fixed Term Plan Series 17 19 has been preponded from February 27 to February 24.        --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 Reliance Tax Saver (ELSS) Fund IDFC Tax Advantage (ELSS) Fund SBI Magnum Tax Gain Schem...

Budget 2014 Highlights for Saving

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   The new finance minister Arun Jaitley has just presented his first budget. What measures does the budget contain that will specifically impact savers and investors? Here they are: 1. Housing loans exemption for self-occupied properties increased to Rs2 lakh: Earlier this amount was Rs1.5 lakhs. This move barely keeps pace with the inflation in asset values.   2. Investment limit under 80 (C) increased to Rs1.5 lakh: This is a good move again and offers some relief to taxpayers.   3. IT exemption increased to Rs2.5 lakh, Rs3 lakh for senior citizens. This comes as a minor relief for taxpayers.   4. Annual PPF ceiling to be enhanced to Rs1.5 lakh, from Rs1 lakh: This is in tune with the change in 80C.   5. Long term capital gains tax for debt funds has been rai...

Franklin India Taxshield

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   This fund maintains a quality portfolio of large-cap orientation. The fund manager adheres to a bottom-up investment approach and looks for companies whose current market price does not reflect future growth prospects. Investments are in companies that can drive future earnings growth. Stocks are selected based on the company's financial strength, management's expertise, growth potential within the industry, and the industry's growth potential.   The portfolio is well-diversified across sectors and market capitalisation and follows a blend of value and growth style of investing. The fund follows a predominantly large-cap allocation of over 70 per cent, with small-cap allocation never exceeding 10 per cent since inception.   Performance The fund doesn't dev...

ELSS Funds for different Risk Profile

Match your Goals Risk Profile With ELSS Investment   DIFFERENT TRACKS Unlike funds with a clearly defined investment universe -- large-cap, mid-cap or multi-cap - Tax Saving Schemes do not specify investment focus If you are looking for an equity Linked Savings Scheme (ELSS) to pare your tax burden, the plethora of options may confuse you. Many investors simply opt for ELSS funds , also called tax saving schemes with the best return over a certain time period. However, this may not yield the best results. There are several types of ELSS funds and it requires a nuanced approach to pick the right one. DIFFERENT RISK PROFILES Unlike funds with a clearly defined investment universe -- large-cap, midcap or even multi-cap schemes in the ELSS category do not specify their investment focus. While these schemes have the flexibility to invest anywhere, most tend to follow a defined template. For instance, some funds take a distinct large-cap tilt with a limited exposure to mid or small-cap st...

Reliance Tax Saver Fund Online

Invest in Reliance Tax Saver Fund Online   ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan Invest in Best Performing 2016 Tax Saver Mutual Funds Online Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a mis...
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