Minimum Balance
Barron's Banking Dictionary:
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Minimum Balance
Amount required in an account to earn interest, qualify for special services, or waive service charges. Accounts that fall below the minimum balance may be subject to service charges if the average balance is below that threshold, or if the account falls below that balance at any time. To get a free checking account, for instance, a customer may have to keep a certain amount in the account at all times or maintain an equivalent amount in other accounts. Cost accounting systems may give customers an earnings credit for funds kept on deposit. Others, instead, work with a flat charge per check or account. See also Average Balance; Target Balance.
Investopedia Financial Dictionary:
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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.
Investopedia Says:
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.
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Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
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