DEFINITION of 'Anticipated Balance'

The amount that a savings account will have at some future date, or that a time deposit will have at maturity, assuming no withdrawals or additional deposits occur. In broad terms, anticipated balance means the net balance in any account at a future point in time. Calculation of the anticipated balance assumes compound interest, rather than simple interest.

BREAKING DOWN 'Anticipated Balance'

Anticipated balances are important in the context of financial planning. For example, consider a couple that wants to save $20,000 over the next four years as the down payment for a house.

They currently have $10,000 in savings, and to achieve their dream of becoming homeowners, would like to know approximately how much they should save per year in a time deposit, in order to reach their target of an anticipated balance of $20,000 in four years. Assuming a compound interest rate on deposits of 3% per annum, they would need to save $2,390 per year.

RELATED TERMS
  1. Call Deposit Account

    A bank account for investment funds that offers the advantages ...
  2. Bank Deposits

    Money placed into a banking institution for safekeeping. Bank ...
  3. Deposit

    1. A transaction involving a transfer of funds to another party ...
  4. Demand Deposit

    Funds held in an account from which deposited funds can be withdrawn ...
  5. Time Deposit

    A savings account or certificate of deposit (CD) held for a fixed-term, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
Related Articles
  1. Personal Finance

    Find the Best Savings Account Rates

    You know how to spot the highest interest rate, but how do you really get the best deal on savings accounts?
  2. Personal Finance

    4 Savings Accounts for Investors

    Curious about the best saving accounts and which ones suit investors?
  3. Investing

    How Time Deposits Work

    A time deposit is an interest-bearing bank deposit that has a specific maturity date.
  4. Retirement

    What Your 401(k) Can Look Like in the Next 20 Years

    Discover how time and compounded growth of earnings can help even a modest 401(k) plan balance grow to a significant sum over a period of 20 years.
  5. Investing

    A Guide to Bank Accounts

    Find out which type of bank account suits your specific needs.
  6. Investing

    Money Market Accounts with the Highest Interest Rates

    Money market savings accounts can offer higher interest rates than regular or even high-yield bank savings accounts – and perks like these.
  7. Personal Finance

    These Savings Accounts Have the Highest Interest Rates

    Don't expect interest from a bank savings account to make you rich. You can do better, however, than the paltry 0.08% average paid in 2015.
  8. Personal Finance

    Protect Your Savings From Their Greatest Threat - You

    Watch your savings magically grow as you make withdrawals a headache and deposits a breeze.
  9. Investing

    Best 2016 IRA Promotions (ETFC, BAC)

    Here are some of the best IRA promotions of 2016, with significant bonuses for large deposits.
RELATED FAQS
  1. What is the difference between a demand deposit and a term deposit?

    Understand the meaning of demand deposits and term deposits, and learn about the major differences between these two types ... Read Answer >>
  2. What are the Federal Reserve's guidelines on demand deposit accounts?

    Read about some of the Federal Reserve's requirements and guidelines regarding the treatment, safeguarding and processing ... Read Answer >>
  3. What proportion of my income should I put into my demand deposit account?

    Find out how much money to keep in your liquid demand deposit accounts, such as checking or savings accounts, and discover ... Read Answer >>
  4. Which is more important to a nation's economy, the balance of trade or the balance ...

    Learn how to differentiate between the balance of trade and balance of payments for international trade and why the balance ... Read Answer >>
Trading Center