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Ideally, you should have a credit balance for financial security. In addition, credit balances are key to wise investments as well one of the safest ways to store your money.
Definition
A credit balance in relation to finances means how much money you have in an account after all withdrawals and payments are paid and completed, according to investorwords.com.
Features
You gain a credit balance when you deposit money at a bank, or a brokerage firm owes you money after selling a security, such as a stock or bond, according to the website netxclientdemo.com.
Benefits
Keeping a credit balance at an institution often means it pays interest on that balance to you for holding cash in the account. Also, the money usually remains liquid for quick use.
Expert Insight
Credit balances at banking institutions also carry a government promise to pay you that sum (up to a certain amount) should the bank ever fail.
Tips
Keeping a credit balance in a money market account generally gives you the best return on your money, but it also requires frequently adding to your current balance.
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