Bank account balances can change almost constantly as you spend and earn money and transfer funds. The balance at a given moment doesn't always offer an accurate picture of an account. Average balances can give a more accurate measure of its typical worth over a given period.
Simple Average Balance
Record the account's balance at the beginning of the period in question.
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Record the balance at the end of the period.
Add the values from steps 1 and 2 and divide by 2. The result is the simple average balance for the period.
Daily Weighted Average Balance
Record your account balance each day of the month.
Add up the daily balances recorded in step 1.
Divide the result of step 2 by the number of days in the month. The result is the average balance for the month, weighted by your daily account balance. A daily weighted average provides a more accurate estimate of your typical account balance for a month than the simple average.
Monthly Weighted Average Balance for a Year
Record your account balance at the end of the each month of a year.
Add up the values you recorded in step 1.
Divide the result of step 2 by 12. The result is the average balance of the account for the year, weighted by month.