minimum-balance

Vocabulary Word

Definition

'Minimum balance' refers to the smallest amount of money a bank or financial institution requires you to have in your account. If you go below this, the bank may charge fees.

Examples in Different Contexts

For savings accounts, the 'minimum balance' can influence the interest rate earned on the account balance. A customer service representative might explain, 'Maintaining a higher minimum balance in your savings account could qualify you for a higher interest rate.'

Practice Scenarios

Business

Scenario:

Our bank offers numerous complementary services to customers who maintain a certain level of funds in their accounts.

Response:

That sounds beneficial. So, what is the minimum balance I should maintain to avail these services?

Economics

Scenario:

Funds kept by a bank help maintain a level of capital that supports economic growth.

Response:

So, the minimum balance requirement is designed to ensure an ample supply of capital within banks.