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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated October 19, 2020

What is an Account Balance?

An account balance is a statement of how much money is in an account.

How Does an Account Balance Work?

For example, let's say John Doe deposits $100 into a new bank account. He withdraws $45 the next day. Then he deposits $20. His new account balance is $100 - $45 + $20 = $75.

Why Does an Account Balance Matter?

An account balance can also be the amount owed to a creditor. For example, if John Doe gets a new credit card, buys patio furniture for $1,000, and charges his $150 dinner out, his account balance on his credit card is $1,150 (and he has only $75 in his bank account, so he might have a big problem).

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