DEFINITION of 'Minimum Balance'

The minimum dollar amount that a customer must have in an account in order to receive some sort of service, such as keeping the account open or receive interest. There can be more than one minimum balance for the same account. For example, a lower balance may be required to keep the account open, while a higher balance can get fees waived or increase the rate of interest paid into the account.

BREAKING DOWN 'Minimum Balance'

Accounts that fall below the minimum balance may be assessed fees, denied interest payments or closed or penalized in some other fashion. The minimum balance may be an average balance or the actual dollar balance in the account. Different banks measure and enforce the minimum balance in different ways.

RELATED TERMS
  1. Account Balance

    1. The amount of money in a financial repository, such as a checking ...
  2. Average Balance

    The balance on a loan or depositary account. A simple average ...
  3. Tiered-Rate Account

    A checking or savings account that pays interest in increasingly ...
  4. Basic Balance

    An economic measure for the balance of payments that combines ...
  5. Minimum Payment

    The smallest amount of a credit card bill that a credit card ...
  6. Average Daily Balance Method

    A credit card accounting method where interest charges are based ...
Related Articles
  1. Personal Finance

    What is an Account Balance?

    An account balance represents the total amount of money in a financial account at any given moment.
  2. 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.
  3. Investing

    A Guide to Bank Accounts

    Find out which type of bank account suits your specific needs.
  4. Financial Advisor

    How Robo-Advisors Are in Reach for More Clients

    With competition heating up in the robo-advisor market, account minimums are dropping as major players fluctuate on deciding how much to charge clients.
  5. Managing Wealth

    Top Premium Checking Accounts of 2015

    Which banks offer the best deals for premium checking accounts – and what do you have to do to qualify for one?
  6. 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?
  7. Personal Finance

    Why Making Minimum Payments Gets You Nowhere

    Getting out of debt can be difficult, but paying off a minimum balance each month only makes things worse.
RELATED FAQS
  1. 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 >>
  2. What's the difference between a trial balance and a balance sheet?

    Discover what is included in a trial balance and a balance sheet, and learn about what sets these two accounting reports ... Read Answer >>
  3. What's the difference between the current account and the balance of payments?

    Learn about the differences between balance of payment and current account; discover different uses of each term and how ... Read Answer >>
Hot Definitions
  1. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  2. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  3. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  4. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the ...
Trading Center