What Is an Account Balance?

An account balance is the amount of money in a financial repository, such as a savings or checking account. The account balance factors all debits and credits. An account balance is also evident on billing statements for credit cards, utilities, and loans.

Calculating Account Balances

An account balance reflects total assets minus total liabilities. In banking, the account balance is the money available in a checking or savings account. The account balance is the net amount available after all deposits and credits have been balanced with any charges or debits.

For investments in brokerage accounts, an account balance can change daily as security prices rise and fall in the market. Other accounts have an account balance, such as a utility bill or a mortgage loan. The account balance for these accounts shows the amount owed.

Examples of Account Balances

For a credit card, various purchases may include $100, $50, and $25, and a returned item that costs $10. The account balance includes the purchases, which total $175, and the item returned for $10. The net of the debits and credits is $165, or $175 minus $10, which is the account balance.

For a checking account, if the starting balance is $500, and a check is received for $1,500, but an automatic payment is scheduled for $750, the account balance might show $2,000 immediately, but the account balance is $1,250.

Account Balance vs. Available Credit

For credit cards, account balances represent the total amount of debt owed at the start of the statement date and include any debt rolled over from previous months with interest charges. Available credit is the term used alongside the account balance to indicate how much of the credit line is left to spend.

The Bottom Line

An account balance represents the available funds in a financial account, such as a checking, savings, or investment account. An account balance in a brokerage account can change daily as security prices rise and fall in the market. A bank account balance can be inaccurate if pending transactions exist.