compensating balance

Also found in: Thesaurus, Financial.
Related to compensating balance: interest
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.compensating balance - 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"
balance - the difference between the totals of the credit and debit sides of an account
References in classic literature ?
Life works upon a compensating balance, and the happiness we gain in one direction we lose in another.
It Is The County s Intent To Maintain A Compensating Balance In The Concentration Account To Support Activity Costs For All Services, Except For Accounts That Are Required To Be Interest Bearing.
In 1848, Hartnup devised an improved bi-metal compensating balance spring that resulted in a more accurate reading for the setting of longitude using chronometers.
The non-interest bearing compensating balance is determined by the volume of IOTA checking account activity and cost of the monthly "sweep fee.
In a compensating balance program, the insured pays the full premium in cash during the policy year, including all amounts for insurance company charges as well as a loss fund.
It may be more economical to pay a fee for these services to avoid minimum or compensating balance requirements.
In 1848 he devised an improved bi-metal compensating balance spring that resulted in a more accurate reading for the setting of longitude.
RiboGene has a compensating balance arrangement with its bank, which also holds $5 million of the $6 million of long term debt.
In order to compete for the liquid assets of businesses, banks set up complicated procedures to pay implicit interest on compensating balance accounts.
Small banks, unlike their larger counterparts, lack the systems to offer compensating balance schemes and sweep accounts that allow these banks to offer businesses credit for or interest on excess demand balances.
The substantial increase in bank debt was primarily utilized to increase the size of the Company's loan and investment portfolio, and to allow the Company to be in compliance with its compensating balance requirements that the Company is required to maintain with its banks.
Float from escrows and reserves provided compensating balances to support their corporate bank financing and warehouse lines.