Compensating balance A minimum balance that must be maintained in an account. The
compensating balance is often used to offset a portion of the cost that a
bank faces when extending a loan or credit to an individual or
business, and is usually calculated as a percentage of the loan
outstanding. The account where the funds are held are typically
non-interest bearing, and the bank is free to use the money in other
Nov 24th, 2014
Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.