Minimum daily balance
In banking, a minimum daily balance is the minimum balance that a banking institution requires account holders to have in their accounts each day in order to waive maintenance fees.[1] This is not to be confused with the average daily balance, which is computed as the sum of daily balances in a billing period divided by the number of days.[2]
This is how most checking account balances are measured. An account balance may drop below the required amount throughout a given day as long as the balance requirement is met at the end of the business day.[3] For example: Joan has a checking account with a "$1,600 minimum daily balance." One day she makes purchases that drop her balance down to $1,300 but then deposits a $400 paycheck before the end of the day. The bank won’t charge her the service fee because her final balance that day is $1,700.
References[edit]
- ^ "Why Banks Require a Minimum Balance". www.gobankingrates.com. Retrieved 2020-05-20.
- ^ "Average Daily Balance | legal definition of Average Daily Balance by Law Insider". www.lawinsider.com. Retrieved 2020-05-20.
- ^ "Avoid a Minimum Balance Fee at Your Bank With These Simple Tips". HuffPost. 2015-03-02. Retrieved 2020-05-20.
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