Adjusted Balance Method

Adjusted Balance Method

A finance/accounting method where costs are based on the amount(s) owing at the end of the current time period (once credits and payments are posted).

Notes:

Most savings accounts use this system. Interest earned in the account is calculated at the end of the month once all the transactions have been posted.

See also: Average Daily Balance Method, Credit Card, Past Due Balance Method, Previous Balance Method

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Adjusted balance method

Method of calculating finance charges that uses the account balance remaining after adjusting for all transactions posted during the given billing period as its basis. Related: Average daily balance method, previous balance method, past due balance method.