Account balance

Account balance

Credits minus debits at the end of a reporting period.

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Account Balance

The amount of money in an account. The account balance is calculated by netting credits and debts on the account. A balance may be positive or negative, the meaning of which differs according to the type of account. A positive balance may be money owned or money owed by the account holder, depending on the type of account. For example, if an individual's checking account has a positive account balance, it indicates that the account holder owns the money in that account. On the other hand, if a credit card account balance is positive, it indicates that the account holder owes this money to the credit card company.

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Account balance. Your account balance is the amount of money you have in one of your financial accounts. For example, your bank account balance refers to the amount of money in your bank accounts.

Your account balance can also be the amount of money outstanding on one of your financial accounts. Your credit card balance, for example, refers to the amount of money you owe a credit card company.

With your 401(k), your account balance, also called your accrued benefit, is the amount your 401(k) account is worth on a date that it's valued. For example, if the value of your account on December 31 is $250,000, that's your account balance.

You use your 401(k) account balance to figure how much you must withdraw from your plan each year, once you start taking required distributions after you turn 70 1/2. Specifically, you divide the account balance at the end of your plan's fiscal year by a divisor based on your life expectancy to determine the amount you must take during the next fiscal year.