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Compensating balance

• An excess balance that is left in a bank to provide indirect compensation for loans extended or services provided.

• A required checking account balance equal to a certain percentage of the amount borrowed from a bank under a line-of-credit or revolving credit agreement.

 
 Embedded terms in definition
 Credit
Revolving credit agreement
 
 Related Terms
 

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Beware of fraud originating in phone messages and faxes: FDIC Consumer News has warned before about crooks who call or e-mail consumers and pretend to be legitimate companies or government agencies wanting people to "verify" or "resubmit" (divulge) confidential information such as bank account or credit card numbers as well as Social Security numbers, passwords and personal identification numbers. Here are variations to know about. More...

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