A minimum cash balance that a company must maintain in a bank account to continue to earn interest or to avoid service charges is referred to as a:

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A minimum cash balance that a company must maintain in a bank account to continue to earn interest or to avoid service charges is referred to as a compensating balance. A petty cash balance is a small amount of cash on hand for minor expenses. A connecting balance is not a financial term. A non-sufficient funds balance occurs when there are not enough funds in a bank account to cover a transaction.

A Minimum Cash Balance That a Company Must Maintain in a Bank