Compensating Balance — synonyms, definition

1. compensating balance (Noun)

1 synonym
offsetting balance
1 definition

compensating balance (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. ex. "the compensating balance increases the effective interest rate to the bank since the net amount loaned is reduced but the interest paid is unchanged"

1 type of
balance