Account Balance
Definition
The account balance is the total amount of money available in a bank account at any given time.
Detailed Explanation
An account balance reflects the current funds available in an individual's or entity's bank account. The account balance may display the amount of funds available after pending transactions take place.
This figure represents the net of all transactions, including deposits, withdrawals, transfers, and any fees charged by the bank. It is a dynamic figure that changes with each account activity.
For checking accounts, the account balance is crucial for managing daily expenses and avoiding overdraft fees.
In savings accounts, it might include accrued interest, contributing to the growth of the balance over time.
Banks provide account holders with various methods to check their balances, such as online banking, mobile apps, ATM inquiries, or bank statements, ensuring they have up-to-date access to their financial information.
Example
Jane Doe deposited $1,000 into her new checking account. A week later, she wrote a check for $200 and made a debit card purchase of $50.
At this point, her account balance would be $750, not accounting for any potential fees or interest.
Key Articles Related To Account Balance
Related Terms
Annual Percentage Yield (APY): The effective yearly return on an investment, taking into account the effect of compounding interest.
Interest Rate: The percentage at which interest is paid by a borrower for the use of money.
Overdraft Fee: A charge by the bank when a transaction exceeds the account's available balance.
Statement: A record provided by the bank, detailing all transactions that occurred in a given period.
FAQs
What affects my account balance?
Every transaction including deposits, withdrawals, purchases, and fees, can change your account balance.
Is my account balance the same as my available balance?
Not always. The available balance might be lower due to holds or pending transactions not yet reflected in the account balance.
How often does my account balance update?
Your account balance updates with every transaction, but the timing for reflecting changes can vary based on the type of transaction and your bank's processing times.
Editor: Ashley Barnett