What is debit and credit in bank statement

When you receive your monthly bank statement, you may come across terms like “debit” and “credit.” Understanding these terms is crucial for managing your finances effectively.

In this article, we’ll delve into the meaning of debit and credit in the context of a bank statement and how they impact your financial transactions.

What Is Debit And Credit In Bank Statement

Debit vs. Credit: Unraveling the Basics


  • Definition: A debit in your bank statement represents money leaving your account. It is an outflow or a reduction of funds.
  • Examples: ATM withdrawals, purchases made with a debit card, and payments.


  • Definition: On the contrary, a credit denotes money coming into your account. It signifies an inflow or an addition of funds.
  • Examples: Salary deposits, refunds, and interest earned.

Navigating Your Bank Statement

To make sense of debits and credits in your bank statement, it’s essential to understand the layout. Most bank statements are organized in a table format, highlighting various details for each transaction.

Bank Statement Table Overview

DateTransaction DescriptionDebit ($)Credit ($)Balance ($)
2023-01-01ATM Withdrawal50.00950.00
2023-01-05Grocery Store Purchase30.00920.00
2023-01-10Salary Deposit2,000.002,920.00
2023-01-15Credit Card Payment100.002,820.00

Deciphering Your Financial Activity

By analyzing the table, you can track the chronological order of transactions and monitor your account balance.

Debits decrease your balance, while credits increase it. Regularly reviewing your bank statement helps you identify spending patterns, detect unauthorized transactions, and maintain financial discipline.


In conclusion, understanding the concepts of debit and credit in your bank statement is fundamental to financial literacy.

Monitoring your transactions, keeping tabs on your account balance, and recognizing the nature of each entry empower you to make informed financial decisions. Take control of your finances by regularly reviewing your bank statements and staying aware of your spending and earning habits.

Whether you’re a seasoned financial guru or just starting, grasping the basics of debits and credits in your bank statement is a crucial step toward financial well-being.