What is an account balance?
An account balance indicates the present value of a financial account, whether it is a checking, savings, investment, or loan account. It shows the amount of money available or the outstanding amount owed, depending on the account type. The balance is determined by subtracting withdrawals and debits from deposits and credits.
Financial institutions offer access to account balances through paper statements, online platforms, or mobile apps, providing account holders with real-time or periodic updates.1
Different types of account balances
Account balances come in various types2, each tailored to specific financial purposes, such as managing everyday transactions, tracking debts, monitoring investments, or accessing diverse financial assets.
- Bank account balance: The total funds available in a savings or checking account. Used for daily transactions, bill payments, and determining available funds for withdrawals.
- Credit card account balance: The total amount owed to a credit card issuer. Helps track spending, payment obligations, and available credit limits.
- Loan Account Balance: The remaining amount of a loan that needs to be repaid. Useful for understanding debt obligations and planning repayments.
- Investment Account Balance: The value of funds or assets held in an investment portfolio, which can vary based on market performance. Used to track the growth of investments and manage asset allocations.
- Brokerage account: A type of investment account that provides access to a variety of financial assets, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs).
Understanding the different types of account balances allows individuals and businesses to manage their finances more effectively, from everyday transactions to long-term financial planning.
Sources:
1 Investopedia: What is an account balance?
2 Indeed: What is an account balance? (Definition and examples)
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A premium bank account is a specialised account offering benefits like reduced fees, higher limits, discounted loans, and financial advice. These perks are available to customers who maintain high balances or engage in relationship banking by holding multiple accounts (e.g., checking, savings, loans) with the same institution. While premium accounts provide valuable services, they often require significant balances to avoid fees, making them ideal for those with higher financial activity or savings.
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