What is an account balance?
An account balance is the monetary amount recorded in a financial account at a particular moment. It reflects all posted credits (money in) and debits (money out) up to that point. Account balances appear not only on bank statements but also on credit-card statements, loan statements, utility bills, and brokerage accounts. For loan or bill accounts, the balance usually shows how much is owed; for deposit and investment accounts, it shows the funds you hold (subject to timing and market moves).
Key definitions
– Account balance: The net amount in an account after adding credits and subtracting debits as of a specific time.
– Available credit: For a line of credit (like a credit card), the remaining portion of your credit limit you can still use. It equals credit limit minus the account balance (and any holds or pending authorizations).
– Posted/current balance vs. available balance: A posted/current balance is what has already been recorded. The available balance may be lower if there are pending payments, holds, or authorizations that haven’t posted yet.
– Statement balance (credit cards): The total debt that appears for a billing period’s closing date; it may differ from the balance you see mid-cycle.
How balances behave by account type
– Checking/savings: Reflect cash deposits and withdrawals. Balances can change when checks clear or when pending transactions post.
– Credit cards/loans: Show the amount you owe. Credit-card balances also roll forward interest and carried balances from prior cycles.
– Brokerage: Fluctuates as the market value of securities changes; cash and unsettled trades also affect the figure.
– Bills/contracts (mortgages, utilities): The balance indicates the amount outstanding.
Common causes of apparent discrepancies
– Pending transactions or holds that have not posted yet.
– Checks that have not cleared the account.
– Deposits that are pending verification.
– Market-price moves for investment accounts (causing daily changes).
Simple formulas
– Net account balance = sum of posted credits − sum of posted debits.
– Available credit = credit limit − account balance (adjust for holds/pending authorizations).
Worked examples
1) Credit-card activity
– Posted purchases: $100, $50, $25 (total debits = $175)
– Posted refund: $10 (credit)
Net account balance = $175 − $10 = $165.
2) Checking account with a pending payment
– Starting posted balance: $500
– Deposit posted immediately: $1,500 → posted balance becomes $2,000
– Scheduled automatic payment (pending authorization): $750
Available funds you can actually spend = $2,000 − $750 = $1,250.
Insight: The posted balance is $2,000 but available balance (what you can safely withdraw or spend) may be $1,250 while the payment is pending.
Quick checklist — what to verify when you check an account balance
– Is the balance a posted/current balance or an available balance?
– Are there pending authorizations, holds, or outstanding checks?
– Have any recent deposits or refunds not yet posted?
– For credit lines: what is your credit limit and has any portion been held?
– For brokerage accounts: did any trades settle or did security prices change today?
– When is the account’s statement closing date (for comparing to the statement balance)?
How to check your balance (typical methods)
– Bank or broker mobile app or website (look at “available” vs. “current/posted” balance).
– ATM (for deposit accounts).
– Visit a branch or call customer service.
– Review the most recent statement (paper or electronic).
Practical warnings
– Treat a posted balance as the record of transactions that have already posted. Do not assume that posted equals fully available if holds or pending items exist.
– Relying only on the displayed balance can lead to overdrafts or declined transactions if authorizations or pending payments reduce your usable funds.
– For brokerage accounts, remember that market prices can change your balance intraday.
Bottom line
An account balance is the net amount recorded in an account at a particular time. It is useful for tracking funds or outstanding debt, but always check whether the figure shown is the posted balance or the amount actually available for withdrawal or further spending. Pending transactions, holds, unsettled items, and market movements can make the “usable” amount different from the simple balance number.
Sources
– Investopedia — Account Balance: https://www.investopedia.com/terms/a/accountbalance.asp
– AccountingTools — AccountingTools home: https://www.accountingtools.com/
– Bank of America — Bank of America home: https://www.bankofamerica.com/
Educational disclaimer
This explainer is for educational purposes only and does not constitute personalized financial, legal, or tax advice. Consult a qualified professional for guidance tailored to your situation.