Average daily balance (ADB),

Definition of Average daily balance (ADB):

1. 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.

How to use Average daily balance (ADB) in a sentence?

1. The bank president was pleased that the average daily balance on the banks accounts had increased over the previous month.
2. He asked me what my average daily balance was and I did not want to tell him because I didnt think it was any of his business.
3. 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.