Understanding Account Balances
An account balance indicates the amount of money held in a financial account, such as a savings or checking account. It encompasses both the credits and debits applied to the account. Moreover, you can find account balances displayed on billing statements for credit cards, utility bills, and loans.
Key Points:
- An account balance signifies the current value of financial accounts like checking, savings, or investment accounts.
- Financial institutions provide account balance details through statements and online services.
- For brokerage accounts, account balances can fluctuate daily based on market securities’ price movements.
Calculating Account Balances
Determining an account balance involves subtracting total liabilities from total assets. In the context of banking, it represents the funds available in checking or savings accounts after reconciling all deposits, credits, charges, and debits.
For brokerage accounts, account balances are subject to daily changes reflecting market security prices. Other accounts like utility bills or mortgage loans also carry an account balance showing the outstanding amount owed.
Bank account balances may not always be precise if checks are pending or transactions are in progress.
Illustrative Examples of Account Balances
For instance, in a credit card scenario, if purchases sum up to $175 ($100 + $50 + $25) and a $10 item is returned, the account balance would be $165 ($175 – $10).
In a checking account, starting with a balance of $500, receiving a $1,500 check with a scheduled $750 automatic payment would display an immediate balance of $2,000, but the actual account balance remains at $1,250.
Account Balance vs. Available Credit
For credit cards, the account balance indicates the total owed debt at the statement date, encompassing both current and rollover debt along with interest charges. Available credit complements the account balance by showing the remaining credit line for spending.
How Can Individuals Check a Bank Account Balance?
Customers can verify their balances by accessing their bank’s online portal, mobile app, or by visiting a branch for assistance.
What Kinds of Accounts Have Account Balances?
Checking, savings, and brokerage accounts typically maintain account balances. Additionally, utility bills, mortgage loans, and credit cards also exhibit account balances.
What’s Available Credit?
Available credit designates the remaining credit limit balance after deducting the current account balance.
In Summary
An account balance highlights the available funds in financial accounts, such as checking, savings, or investment accounts. Account balances in brokerage accounts are subject to daily fluctuations due to securities market movements. It’s important to note that bank account balances may not be fully accurate if there are pending transactions.