compensating balance

1. Also, compensated balance, compensation balance. a balance wheel in a timepiece, designed to compensate for variations in tension in the hair spring caused by changes in temperature.
2. Banking. a deposit balance that is required to be left on deposit by a company to maintain or guarantee credit.

* * *

Universalium. 2010.

Look at other dictionaries:

  • compensating balance — 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 partial compensation to the bank for the credit facility. (2) The amount …   Financial and business terms

  • Compensating balance — An excess balance that is left in a bank to provide indirect compensation for loans extended or services provided. The New York Times Financial Glossary * * * compensating balance compensating balance ➔ balance1 * * * compensating balance UK US… …   Financial and business terms

  • compensating balance — noun a minimum credit balance that a bank may require a borrower to keep on deposit as a condition for granting a loan; a common requirement for establishing a line of credit at a bank the compensating balance increases the effective interest… …   Useful english dictionary

  • Compensating Balance — A minimum balance that must be maintained in an account. The compensating balance is often used to offset a portion of the cost that a bank faces when extending a loan or credit to an individual or business, and is usually calculated as a… …   Investment dictionary

  • compensating balance — The balance a borrower from a bank is required to keep on deposit as a condition of the loan or for continuing line of credit …   Black's law dictionary

  • compensating balance — A sum of money deposited at a bank by a customer as a condition for the bank to lend money to the customer …   Accounting dictionary

  • compensating balance — 1. An amount a bank can offset between a loan and a deposit. 2. Two or more accounting *balances that *offset one another …   Auditor's dictionary

  • compensating balance — /ˌkɒmpənseɪt bæləns/ noun the amount of money which a customer has to keep in a bank account in order to get free services from the bank …   Dictionary of banking and finance

  • compensating balance — Fin 1. the amount of money a bank requires a customer to maintain in a non interest bearing account, in exchange for which the bank provides free services 2. the amount of money a bank requires a customer to maintain in an account in return for… …   The ultimate business dictionary

  • Balance wheel — in a cheap 1950s alarm clock, the Apollo, by Lux Mfg. Co. showing the balance spring (1) and regulator (2) …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.