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
What Is Account Balance? Account balance is the total amount of money held in a financial account at a specific time. The net amount is always the account balance, whether you have savings, checking, or investment account.
Does balance mean I owe money or have money? ›
The balance on your credit card is the total amount of money you owe to your credit card issuer. This amount changes each month based on how you use your card.
What is the difference between account balance and total balance? ›
Your current bank balance is the total of all posted transactions as of the previous day while your available balance includes pending or posted transactions for today. For help managing your wealth and all your finances, consider working with a financial advisor.
Why is it called account balance? ›
Because the word “balance” means the amount remaining when debits are subtracted from credits. The term comes from scales with two plates which measure the difference between the weights of two things just as an account balance is the difference between the debits and credits.
Is my account balance what I owe? ›
Your statement balance typically shows what you owe on your credit card at the end of your last billing cycle. Your current balance, however, will typically reflect the total amount that you owe at any given moment.
Can I spend my account balance? ›
The current balance on your bank account is the total amount of money in the account. But that doesn't mean it's all available to spend. Some of the funds included in your current balance may be from deposits you made or checks you wrote that haven't cleared yet, in which case they're not available for you to use.
Does balance due mean I owe? ›
It means you owe.
Does balance mean remaining? ›
It can be both,balance can be how much you have left in your checking/savings account or it can also be the balance left that I owe on a loan/debt, for example lets say I have $ 1,500 left in my checking acct and I owe a balance of $ 1,000 on my truck loan after my latest payment was made ,both of those are a balance, ...
What is the difference between account balance and available balance? ›
Your current balance reflects the amount of money in your bank account at any given moment. Your available balance is the amount of money you have to spend, including any pending payments and deposits. The key difference is that your pending purchases do not appear in the current balance.
Can I withdraw my account balance? ›
The answer is yes because your bank account balance shows you how much money you have in your account. That money is there for you withdraw or leave in place, perhaps in order to collect interest payments on it.
An account balance is the total amount of money in a bank account or general ledger account. Accountants or banks usually calculate this by taking the sum of all deposits and subtracting all withdrawals.
Is balance the same as amount? ›
Balance is the difference between credits and debits in an account and can be the same as amount due in certain instances. For example, the current balance and amount due remain the same during a one-time purchase of a good or service.
What does it mean when it says account balance? ›
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.
What's my account balance? ›
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.
Is a balance what you owe or what you have? ›
Your statement balance shows what you owed on your credit card at the end of your last billing cycle, whereas your current balance reflects the total you actually owe at any given moment.
What does account balance mean on phone bill? ›
The account balance includes any payments, credits or adjustments made on an account since your last bill, while the amount due on the last bill shows your balance owing on a specific bill date.
What does account balance mean on financial aid? ›
When your school gives you financial aid, sometimes money is left over after your aid is applied to your tuition, fees, and other school charges. This remaining amount is called a credit balance.
What is difference between clear balance and account balance? ›
Total balance is just the current amount in your bank account (This does not include cheque deposits or withdrawals or any other kind of transactions which is still in the process of clearing). Whereas clear balance is the amount in your bank account after taking in to account every pending transactions.
