average daily balance (ADB)

Popular Terms
Amount used by banks to compute interest on deposit balances, and finance charges on credit card balances. For deposit accounts, ADB is equal to the total of balances in a month divided by the days in that month. For credit cards, it is total of the opening balance of the day less withdrawals (or purchases) plus any charges, divided by the number of days in that billing period.

Use 'average daily balance (ADB)' in a Sentence

He asked me what my average daily balance was and I did not want to tell him because I didn't think it was any of his business.
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The bank president was pleased that the average daily balance on the bank's accounts had increased over the previous month.
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The credit card company said that the interest would be calculated based on the average daily balance. Therefore, they averaged what your card balance was throughout the cycle, to charge interest.
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