How to Calculate Average Checking Account Balance

Average checking account balance is the average amount that exists in one month or 30 days. Banks use the average to calculate interest so they will usually provide this number for you, however, understanding how to calculate it yourself is useful to validate the bank's calculation.

Step 1

Review the calculation. Add the daily balance over the defined time period and divide that number by the total number of days in that period.

Step 2

Work through an example. Let's say you need to calculate the average daily balance for a checking account over five days. The balance on day 1 through 5 is $1,000, $1,100, $1,200, $600, and $300, respectively.

Step 3

Calculate the average daily balance for the five days. The sum of the five days is: $1,000+$1,,100+$,1200+$600+$300=$4200.

Step 4

Divide the sum by the number of days. You want the average daily balance over five days so divide the sum by 5. The calculation is: $4,200/5 days = $840. The average daily balance for five days is $840.