NOUN
-
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
How To Use compensating balance In A Sentence
- This amount is called a compensating balance and effectively raises the cost of interest. are as previously specified.
- It forms, in a sort, or is to form, the compensating balance-wheel of the successful working machinery of aggregate America.
- the compensating balance increases the effective interest rate to the bank since the net amount loaned is reduced but the interest paid is unchanged
- This amount is called a compensating balance and effectively raises the cost of interest. are as previously specified.
