In the context of personal finance and banking, a balance refers to the amount of money that remains in a particular account at any given time. It represents the difference between all deposits made into the account and all withdrawals or payments made from the account. Balances can be positive (indicating a credit or surplus) or negative (indicating a debit or deficit).

Types of balances

Account balance

The account balance is the total amount of money currently available in a bank account. It is updated in real-time as transactions are processed, including deposits, withdrawals, transfers, and payments. Account balances are typically checked through online banking, mobile apps, ATMs, or bank statements.

Available balance

The available balance is the amount of money in an account that is accessible for immediate use. It may differ from the account balance due to pending transactions, such as unprocessed deposits or holds placed on certain funds (e.g., pending debit card transactions or cheque holds).

Ledger balance

The ledger balance, also known as the current balance, reflects the balance at the end of the previous business day after all transactions have been processed. It does not include any pending transactions that have not yet been posted to the account.

Minimum balance

Some accounts, particularly savings accounts, may have a minimum balance requirement. This is the minimum amount of money that must be maintained in the account to avoid fees or penalties. Falling below this balance can result in charges or loss of account privileges.

Credit card balance

The credit card balance is the total amount owed on a credit card account. It includes all purchases, interest charges, fees, and payments made during the billing cycle. The balance can be paid in full or partially, with any remaining balance carried over to the next billing cycle and subject to interest charges.

Importance of monitoring balances

Avoiding overdrafts

Regularly checking account balances helps avoid overdrafts, which occur when withdrawals or payments exceed the available balance. Overdrafts can result in significant fees and negative impacts on credit scores.

Managing cash flow

Monitoring balances is essential for effective cash flow management. It allows individuals and businesses to ensure they have sufficient funds to cover upcoming expenses and avoid financial shortfalls.

Preventing fraud

Regularly reviewing account balances and transactions can help detect and prevent fraudulent activity. Unauthorised transactions can be identified and reported promptly, minimising potential losses.

Budgeting and financial planning

Keeping track of account balances is a key component of budgeting and financial planning. It helps individuals understand their spending habits, manage expenses, and work towards financial goals such as saving for a major purchase or paying off debt.

How to check balances

Online banking

Most banks offer online banking services that allow customers to check their account balances in real-time. Online banking provides a convenient way to monitor accounts, view transaction histories, and manage finances from anywhere with internet access.

Mobile banking apps

Mobile banking apps provide a user-friendly interface for checking balances on smartphones and tablets. These apps often include additional features such as mobile deposits, bill payments, and budgeting tools.


ATMs allow customers to check their account balances, withdraw cash, and perform other banking transactions. Balances displayed at ATMs are typically updated in real-time.

Bank statements

Monthly bank statements provide a summary of account balances and transactions over a specified period. While not as immediate as online or mobile banking, statements are useful for reviewing account activity and ensuring accuracy.

Phone banking

Many banks offer phone banking services that allow customers to check their balances and perform other transactions over the phone. This service is particularly useful for those who may not have access to online or mobile banking.

Example of balance monitoring

Consider a university student who has a part-time job and a savings account. The student uses online banking to check their account balance regularly, ensuring they have enough funds to cover their monthly expenses, such as rent, utilities, and groceries. By monitoring their balance, the student can also set aside money for future goals, such as a holiday or purchasing a new laptop. Additionally, the student can quickly detect any unauthorised transactions and report them to their bank, protecting their financial security.


Understanding and monitoring account balances is crucial for effective financial management. Regularly checking balances helps avoid overdrafts, manage cash flow, prevent fraud, and support budgeting and financial planning. By utilising online banking, mobile apps, ATMs, bank statements, and phone banking, individuals can stay informed about their financial status and make informed decisions to achieve their financial goals.

For more information on managing your finances, you can visit the Australian Government’s MoneySmart website.

DISCLAIMER: The information provided on this page is for general informational and educational purposes only and is never intended as financial advice. While we strive to ensure that the content is accurate and up-to-date, it may not reflect the most current legal or financial developments. Always consult with a qualified financial advisor or professional before making any financial decisions. Use the information at your own risk.

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