Minimum daily balance

In banking, a minimum daily balance is the minimum balance that a banking institution requires account holders to have in their accounts each day in order to waive maintenance fees. This is not to be confused with the average daily balance, which is computed as the sum of daily balances in a billing period divided by the number of days.

This is how most checking account balances are measured. Your balance may drop below the required amount at any time as long as you meet the balance requirement at the end of the business day (usually 5 pm). For example: Joan has a checking account with a “$500 minimum daily balance.” One day she makes purchases that drop her balance down to $200 but then deposits a $400 paycheck before the end of the day. The bank won’t charge her the service fee because her final balance that day is $600.