What Is an Account Balance?
An account balance is the amount of money in a financial repository, such as a savings or checking account. The account balance factors all debits and credits. An account balance is also evident on billing statements for credit cards, utilities, and loans.
Key Takeaways
- An account balance represents the current value of a financial account, such as a checking, savings, or investment account.
- Financial institutions provide account balances on paper statements and online.
- For investments in brokerage accounts, an account balance can change daily as security prices rise and fall in the market.
Calculating Account Balances
An account balance reflects total assets minus total liabilities. In banking, the account balance is the money available in a checking or savings account. The account balance is the net amount available after all deposits and credits have been balanced with any charges or debits.
For investments in brokerage accounts, an account balance can change daily as security prices rise and fall in the market. Other accounts have an account balance, such as a utility bill or a mortgage loan. The account balance for these accounts shows the amount owed.
A bank account balance can be inaccurate if a check has yet to clear the bank or a pending transaction has not yet gone through.
Examples of Account Balances
For a credit card, various purchases may include $100, $50, and $25, and a returned item that costs $10. The account balance includes the purchases, which total $175, and the item returned for $10. The net of the debits and credits is $165, or $175 minus $10, which is the account balance.
For a checking account, if the starting balance is $500, and a check is received for $1,500, but an automatic payment is scheduled for $750, the account balance might show $2,000 immediately, but the account balance is $1,250.
Account Balance vs. Available Credit
For credit cards, account balances represent the total amount of debt owed at the start of the statement date and include any debt rolled over from previous months with interest charges. Available credit is the term used alongside the account balance to indicate how much of the credit line is left to spend.
How Can Individuals Check a Bank Account Balance?
Account holders can check balances by signing in to their bank's app or website and looking at their latest transactions or by visiting the local branch and speaking with a representative.
What Kinds of Accounts Have Account Balances?
Checking, savings, and brokerage accounts all have account balances. However, expenses like utility bills, mortgage loans, or credit cards also have account balances.
What's Available Credit?
Available credit refers to the amount remaining on the credit line. The available credit can be determined by subtracting the account balance from the credit limit.
The Bottom Line
An account balance represents the available funds in a financial account, such as a checking, savings, or investment account. An account balance in a brokerage account can change daily as security prices rise and fall in the market. A bank account balance can be inaccurate if pending transactions exist.
FAQs
At an ATM. To check your account balance at an ATM, insert your debit or ATM card, enter your Personal Identification Number (PIN) and select “balance inquiry” or a similar option. Your account balance will be displayed on the screen, along with any recent transactions.
What is the difference between an account balance and a minimum balance? ›
The minimum balance is usually calculated as the actual dollar balance in the account but may be an average balance in the account over a certain period of time. This is beneficial for individuals who don't have a steady source of income. There can also be more than one minimum balance for the same account.
What is a good account balance? ›
The amount of money you should keep in a checking account will depend on your specific situation, including your income and expenses, but a useful rule-of-thumb is one months' living expenses.
What is the meaning of account balance? ›
What is an Account Balance? An account balance is the amount of money present in a financial repository during the current accounting period. It is the net difference between the credits and debits posted in any given accounting cycle, added to the balance carried forward from the previous month.
Does account balance mean I have money? ›
Your account balance is the total amount of money that is currently in your account, including any pending transactions (e.g., debit card purchases that have not cleared).
What is the current account balance? ›
The current account balance is one of the components of a country's balance of payments, which is a record of all the economic transactions between a country and the rest of the world. A current account deficit is a sign that a country is borrowing more money from other countries than it is lending to other countries.
How much bank balance is enough? ›
For the emergency stash, most financial experts set an ambitious goal of the equivalent of six months of income. A regular savings account is "liquid." That is, your money is safe and you can access it at any time without a penalty and with no risk of a loss of your principal.
What is the normal account balance? ›
Definition of 'normal balance'
The normal balance of an account is the side of the account that is positive or increasing. The normal balance for asset and expense accounts is the debit side, while for income, equity, and liability accounts it is the credit side.
How much balance should I have in my checking account? ›
How much money do experts recommend keeping in your checking account? It's a good idea to keep one to two months' worth of living expenses plus a 30% buffer in your checking account.
What is account balance with example? ›
Examples of Account Balances
For a credit card, various purchases may include $100, $50, and $25, and a returned item that costs $10. The account balance includes the purchases, which total $175, and the item returned for $10. The net of the debits and credits is $165, or $175 minus $10, which is the account balance.
What Is Basic Balance? Basic balance is an economic measure for the balance of payments that combines the current account and capital account balances. The current account shows the net amount of a country's income if it is in surplus, or spending if it is in deficit.
What is balancing of an account answer? ›
Balancing an account is defined as calculating the difference between the respective sides, i.e., debit and credit of an account and mentioning the balance on the side with the lesser amount.
How do I find my current account balance? ›
How to Check Your Bank Account Balance
- On Your Bank's Website.
- Through Your Banking App.
- At an ATM.
- Over the Phone.
- With Bank Statements.
- Through Account Alerts.
- With a Bank Teller.
Follow these instructions to check your bank account balance by visiting an ATM.
- Insert your debit card into the ATM slot.
- Select your preferred language.
- Enter your four-digit ATM PIN.
- Select the bank inquiry or bank balance option.
6 Easy Steps to Check Your Bank Balance
- Log In Online. You can check your account balance online anytime—and much more. ...
- Mobile Apps and Text Messages. Mobile phones, tablets, and other devices make it easy to check on accounts from just about anywhere. ...
- Use an ATM. ...
- Call the Bank. ...
- Set Up Alerts. ...
- Talk to a Teller.
The most common way is to use the net banking service to check your account balance. To use this feature, go to the relevant bank's official website on your phone and log in. If this is your first visit, you must first register by clicking on the 'register' or 'first time user' tabs.
