Anyone with a business bank account is always checking their bank balances. Business bank accounts tend to have regular transactions, making it necessary for one to check the balances regularly for easy management of the transaction.
One needs to know how much money they have in their account, as it helps with the planning purposes. However, sometimes, some of the bank balances read on the account tend to be confusing to the account holders. Read through this article and understand the different bank account balances.
4 Important Account Balances to Understand
Account balance is the amount of money that is available in the account. It tends to reflect the net amount available after debits and credits transactions in the account. One can easily check their account balance using online banking platforms or visiting their branches. There are different account balances that everyone needs to understand. They include:
1. Actual Balance
The actual balance is the amount of money in the account at the given time. It reflects the different transactions that have been done in the account, leaving out the unauthorized transactions and the pending ones. The actual balance is the compilation of all the outgoing and incoming funds within an account.
2. Available Balance
The available balance is the total amount of money in the account that one can use for withdrawals and other purchases in a checking or savings account.
It reflects the amount of money that one can withdraw and use at a specific time in case they need money, minus any pending payments and deposits. The available balance helps account owners to keep their accounts from getting any overdrafts.
3. Statement Balance
The statement balance is what an account owes at the end of a billing cycle, which tends to be 20-45 days. It is a compilation of all the unpaid balances. Purchases and interests accrued in the account minus any other payments or credits in the previous statements.
When paying the money bills, it is always essential to check credit card current balance vs statement balance as it helps find out what you owe and the amount of money you have to spend. According to the experts at SoFi, “As each billing cycle closes, you will be provided with a statement balance. You will also likely be provided with a due date. At the time you make a payment, you may decide to pay off the statement balance, the current balance, the minimum payment, or some other amount of your choosing.”
4. The Opening Balance
The opening balance is the amount of money deposited in the account after opening it. Most banks urge their customers to ensure that they deposit a certain amount of money after opening the account to activate it.
Understand your Bank Balances
Knowing how to interpret the bank account balance and what they mean is one of the basic financial skills that every account holder should have it helps one be in a better position to interpret their finances, making them save easily.
Any misinterpretation of the bank balances can cause overdrafts, which would interfere with the financial goals. It is important to understand the credit card current balance vs. statement balances, as it helps one plan their finances.
Having a SoFi checking and savings account can be one of the best ways to achieve financial goals because it helps one save.
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