What does compensating balance mean?
Definitions for compensating balance
com·pen·sat·ing bal·ance
This dictionary definitions page includes all the possible meanings, example usage and translations of the word compensating balance.
Princeton's WordNet
compensating balance, offsetting balancenoun
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 rate to the bank since the net amount loaned is reduced but the interest paid is unchanged"
ChatGPT
compensating balance
A compensating balance is a minimum balance that a borrower must maintain in a bank account as part of a loan agreement. This balance serves as a form of collateral for the lender as it reduces the risk of defaults. It is commonly used in business loans where a portion of the loaned funds are kept in the bank account, earning no interest. They are usually a percentage of the loan outstanding.
Matched Categories
Numerology
Chaldean Numerology
The numerical value of compensating balance in Chaldean Numerology is: 6
Pythagorean Numerology
The numerical value of compensating balance in Pythagorean Numerology is: 3
Translation
Find a translation for the compensating balance definition in other languages:
Select another language:
- - Select -
- 简体中文 (Chinese - Simplified)
- 繁體中文 (Chinese - Traditional)
- Español (Spanish)
- Esperanto (Esperanto)
- 日本語 (Japanese)
- Português (Portuguese)
- Deutsch (German)
- العربية (Arabic)
- Français (French)
- Русский (Russian)
- ಕನ್ನಡ (Kannada)
- 한국어 (Korean)
- עברית (Hebrew)
- Gaeilge (Irish)
- Українська (Ukrainian)
- اردو (Urdu)
- Magyar (Hungarian)
- मानक हिन्दी (Hindi)
- Indonesia (Indonesian)
- Italiano (Italian)
- தமிழ் (Tamil)
- Türkçe (Turkish)
- తెలుగు (Telugu)
- ภาษาไทย (Thai)
- Tiếng Việt (Vietnamese)
- Čeština (Czech)
- Polski (Polish)
- Bahasa Indonesia (Indonesian)
- Românește (Romanian)
- Nederlands (Dutch)
- Ελληνικά (Greek)
- Latinum (Latin)
- Svenska (Swedish)
- Dansk (Danish)
- Suomi (Finnish)
- فارسی (Persian)
- ייִדיש (Yiddish)
- հայերեն (Armenian)
- Norsk (Norwegian)
- English (English)
Word of the Day
Would you like us to send you a FREE new word definition delivered to your inbox daily?
Citation
Use the citation below to add this definition to your bibliography:
Style:MLAChicagoAPA
"compensating balance." Definitions.net. STANDS4 LLC, 2024. Web. 24 Apr. 2024. <https://www.definitions.net/definition/compensating+balance>.
Discuss these compensating balance definitions with the community:
Report Comment
We're doing our best to make sure our content is useful, accurate and safe.
If by any chance you spot an inappropriate comment while navigating through our website please use this form to let us know, and we'll take care of it shortly.
Attachment
You need to be logged in to favorite.
Log In