average daily balance

average daily balance
The average daily balance is a method used to calculate finance charges. It is calculated by adding the outstanding balance on each day in the billing period, and dividing that total by the number of days in the billing period. The calculation includes new purchases and payments. American Banker Glossary
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A method for calculating interest in which the balance owed each day by a customer is divided by the number of days. See also: adjusted balance method and previous balance method. Bloomberg Financial Dictionary

Financial and business terms. 2012.

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  • average daily balance — daily balances; average daily balance The various balances for the different days in the period for which interest is to be paid, and the average daily balance for the interest period means the sum of these daily balances divided by the number of …   Black's law dictionary

  • average daily balance — daily balances; average daily balance The various balances for the different days in the period for which interest is to be paid, and the average daily balance for the interest period means the sum of these daily balances divided by the number of …   Black's law dictionary

  • average daily balance — /ˌæv(ə)rɪdʒ ˌdeɪli bæləns/ noun the balance in an account calculated by taking the final balances for each day, and averaging them (NOTE: The average daily balance is used for the purpose of calculating interest or bank charges.) …   Dictionary of banking and finance

  • Average Daily Balance Method — A finance/accounting method where costs (and interest) are based on the amount(s) owing at the end of each day. Most department store credit cards use this system. Interest payable is calculated daily, this results in less interest payable… …   Investment dictionary

  • Average Collected Balance — The average balance of collected funds (less any uncleared or uncollected deposits) in a bank account over a specified period, usually one month. The average collected balance is calculated by adding the daily collected balance and… …   Investment dictionary

  • Minimum daily balance — In banking, a minimum daily balance is the minimum balance that a banking institution requires account holders to have in their accounts EACH day in order to waive maintenance fees. A minimum average daily balance is the minimum average balance… …   Wikipedia

  • daily balance — An expression of moment in reference to an interest bearing bank account, meaning the balance standing in favor of the depositor at the close of business on any day of the interest period, an average being taken of the daily balances for the… …   Ballentine's law dictionary

  • daily balances — daily balances; average daily balance The various balances for the different days in the period for which interest is to be paid, and the average daily balance for the interest period means the sum of these daily balances divided by the number of …   Black's law dictionary

  • daily balances — daily balances; average daily balance The various balances for the different days in the period for which interest is to be paid, and the average daily balance for the interest period means the sum of these daily balances divided by the number of …   Black's law dictionary

  • average — I (midmost) adjective center, centermost, intermediate, mean, mean proportioned, medial, median, mediate, medium, mid, middle, middle class, middle grade, middlemost, middling associated concepts: average annual earnings or wages, average capital …   Law dictionary

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