Compensating balance

Compensating balance

An offsetting balance. A requirement by some banks that a borrower maintain a minimum balance in a checking or savings account as a condition of a loan. The offsetting balance increases the effective interest rate to the bank since the net amount loaned is reduced but the interest paid is unchanged.

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Part of Speech: noun
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Industry/Domain: Accounting
Category: Auditing
Company: AIS
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Related terms

compensating balance

Accounting; Auditing

An offsetting balance. A requirement by some banks that a borrower maintain a minimum balance in a checking or savings account as a condition of a loan. The offsetting balance ...

compensating balance

Financial services; General Finance

An excess balance that is left in a bank to provide indirect compensation for loans extended or services provided.

compensating balance

Law; Legal services; General law

A minimum amount of money that a person or company must keep in a no-interest checking account to compensate a bank for loans or other services.

compensating balance

Banking; Personal banking

A method of paying the bank for providing services.(1) In lending, compensating balances are minimum balances that the bank requires a borrower to maintain with the bank as ...

compensating balance

Law; General law

A minimum amount of money that a person or company must keep in a no-interest checking account to compensate a bank for loans or other services.

balance

Internet; Internet communication

A control feature often found in computer or stereo speakers. The balance control adjusts the amount of sound you hear from the right or left speakers. Generally, the balance ...

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Accounting; Auditing

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revenue cycle

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Accounting; Auditing

To examine again. The overall review of audit documentation is completed after field work. A peer review is a practice monitoring program in which audit documentation of one CPA ...

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