diff --git a/app/Http/Controllers/TransactionController.php b/app/Http/Controllers/TransactionController.php
index 688c64b5..e4087fb3 100644
--- a/app/Http/Controllers/TransactionController.php
+++ b/app/Http/Controllers/TransactionController.php
@@ -172,7 +172,7 @@ class TransactionController extends Controller
         ]);
     }
 
-    public function store(StoreTransactionRequest $request): JsonResponse
+    public function store(StoreTransactionRequest $request, ManualBalanceAdjuster $balanceAdjuster): JsonResponse
     {
         $data = $request->validated();
         $labelIds = $data['label_ids'] ?? null;
@@ -194,6 +194,10 @@ class TransactionController extends Controller
             $transaction->labels()->sync($labelIds);
         }
 
+        if ($request->boolean('update_balance')) {
+            $balanceAdjuster->applyCreatedTransaction($transaction);
+        }
+
         return response()->json([
             'data' => $transaction->load('labels'),
         ], 201);
diff --git a/app/Services/ManualBalanceAdjuster.php b/app/Services/ManualBalanceAdjuster.php
index 3fada2bb..758ae109 100644
--- a/app/Services/ManualBalanceAdjuster.php
+++ b/app/Services/ManualBalanceAdjuster.php
@@ -40,4 +40,38 @@ class ManualBalanceAdjuster
             ],
         );
     }
+
+    /**
+     * Apply a newly created transaction to its manual account's balance.
+     *
+     * Adjusts the balance on the transaction's own date. The base is that day's
+     * balance if one exists, otherwise the closest earlier balance, otherwise
+     * zero (the first transaction on the account). Connected accounts are
+     * skipped because their balances come from bank sync.
+     */
+    public function applyCreatedTransaction(Transaction $transaction): void
+    {
+        $account = $transaction->account;
+
+        if ($account === null || $account->isConnected()) {
+            return;
+        }
+
+        $transactionDate = $transaction->transaction_date->toDateString();
+
+        $baseBalance = $account->balances()
+            ->where('balance_date', '<=', $transactionDate)
+            ->orderByDesc('balance_date')
+            ->value('balance') ?? 0;
+
+        AccountBalance::updateOrCreate(
+            [
+                'account_id' => $account->id,
+                'balance_date' => $transactionDate,
+            ],
+            [
+                'balance' => $baseBalance + $transaction->amount,
+            ],
+        );
+    }
 }
diff --git a/resources/js/components/transactions/edit-transaction-dialog.test.tsx b/resources/js/components/transactions/edit-transaction-dialog.test.tsx
index c6c9c4a9..bd4fcccb 100644
--- a/resources/js/components/transactions/edit-transaction-dialog.test.tsx
+++ b/resources/js/components/transactions/edit-transaction-dialog.test.tsx
@@ -3,12 +3,6 @@ import type React from 'react';
 import { beforeEach, describe, expect, it, vi } from 'vitest';
 import { EditTransactionDialog } from './edit-transaction-dialog';
 
-vi.mock('@/actions/App/Http/Controllers/AccountBalanceController', () => ({
-    indexBalances: () => ({ url: '/balances' }),
-    store: () => ({ url: '/balances' }),
-    index: () => ({ url: '/balances' }),
-}));
-
 vi.mock('@/components/shared/label-combobox', () => ({
     LabelCombobox: () => <div />,
 }));
@@ -215,4 +209,22 @@ describe('EditTransactionDialog', () => {
             'account-1',
         );
     });
+
+    it('checks "update account balance" by default in create mode', () => {
+        render(
+            <EditTransactionDialog
+                transaction={null}
+                categories={[]}
+                accounts={[checkingAccount]}
+                banks={[]}
+                labels={[]}
+                open
+                onOpenChange={vi.fn()}
+                onSuccess={vi.fn()}
+                mode="create"
+            />,
+        );
+
+        expect(screen.getByRole('checkbox')).toBeChecked();
+    });
 });
diff --git a/resources/js/components/transactions/edit-transaction-dialog.tsx b/resources/js/components/transactions/edit-transaction-dialog.tsx
index c5fe7f03..9a88590f 100644
--- a/resources/js/components/transactions/edit-transaction-dialog.tsx
+++ b/resources/js/components/transactions/edit-transaction-dialog.tsx
@@ -1,7 +1,3 @@
-import {
-    index as indexBalances,
-    store as storeBalance,
-} from '@/actions/App/Http/Controllers/AccountBalanceController';
 import { LabelCombobox } from '@/components/shared/label-combobox';
 import { CategorySelect } from '@/components/transactions/category-select';
 import { AmountInput } from '@/components/ui/amount-input';
@@ -28,7 +24,6 @@ import { Textarea } from '@/components/ui/textarea';
 import { useSyncContext } from '@/contexts/sync-context';
 import { useLocale } from '@/hooks/use-locale';
 import { decrypt, importKey } from '@/lib/crypto';
-import { getCsrfToken } from '@/lib/csrf';
 import { getStoredKey } from '@/lib/key-storage';
 import { evaluateRulesForNewTransaction } from '@/lib/rule-engine';
 import { appendNoteIfNotPresent } from '@/lib/utils';
@@ -102,9 +97,10 @@ export function EditTransactionDialog({
     const [updateAccountBalance, setUpdateAccountBalance] = useState(() => {
         if (typeof window !== 'undefined') {
             const stored = localStorage.getItem(STORAGE_KEY_UPDATE_BALANCE);
-            return stored === 'true';
+            // Active by default; only an explicit opt-out turns it off.
+            return stored === null ? true : stored === 'true';
         }
-        return false;
+        return true;
     });
 
     useEffect(() => {
@@ -272,68 +268,6 @@ export function EditTransactionDialog({
         localStorage.setItem(STORAGE_KEY_UPDATE_BALANCE, String(checked));
     }
 
-    async function updateBalanceForTransaction(
-        accountIdToUpdate: string,
-        transactionDateStr: string,
-        transactionAmount: number,
-    ) {
-        const xsrfToken = getCsrfToken();
-
-        try {
-            // Fetch balances from backend
-            const balancesResponse = await fetch(
-                indexBalances.url(accountIdToUpdate),
-                {
-                    headers: {
-                        Accept: 'application/json',
-                    },
-                },
-            );
-
-            if (!balancesResponse.ok) {
-                throw new Error('Failed to fetch balances');
-            }
-
-            const balancesData = await balancesResponse.json();
-            const accountBalances = (balancesData.data || []).sort(
-                (a: { balance_date: string }, b: { balance_date: string }) =>
-                    new Date(b.balance_date).getTime() -
-                    new Date(a.balance_date).getTime(),
-            );
-
-            const latestBalance =
-                accountBalances.length > 0 ? accountBalances[0].balance : 0;
-
-            const newBalance = latestBalance + transactionAmount;
-
-            // Store new balance via backend
-            const storeResponse = await fetch(
-                storeBalance.url(accountIdToUpdate),
-                {
-                    method: 'POST',
-                    headers: {
-                        'Content-Type': 'application/json',
-                        'X-XSRF-TOKEN': xsrfToken,
-                        Accept: 'application/json',
-                    },
-                    body: JSON.stringify({
-                        balance_date: transactionDateStr,
-                        balance: newBalance,
-                    }),
-                },
-            );
-
-            if (!storeResponse.ok) {
-                throw new Error('Failed to store balance');
-            }
-        } catch (error) {
-            console.error('Failed to update account balance:', error);
-            toast.error(
-                __('Transaction created, but failed to update balance'),
-            );
-        }
-    }
-
     async function handleSubmit(e: React.FormEvent) {
         e.preventDefault();
 
@@ -400,23 +334,28 @@ export function EditTransactionDialog({
                     throw new Error(__('Selected account not found'));
                 }
 
-                const createdTransaction = await transactionSyncService.create({
-                    user_id: '00000000-0000-0000-0000-000000000000',
-                    account_id: accountId,
-                    category_id: finalCategoryId,
-                    description: finalDescription,
-                    description_iv: finalDescriptionIv,
-                    transaction_date: transactionDate,
-                    amount: amount,
-                    currency_code: selectedAccount.currency_code,
-                    notes: encryptedNotes,
-                    notes_iv: notesIv,
-                    creditor_name: null,
-                    debtor_name: null,
-                    source: 'manually_created' as const,
-                    label_ids:
-                        finalLabelIds.length > 0 ? finalLabelIds : undefined,
-                });
+                const createdTransaction = await transactionSyncService.create(
+                    {
+                        user_id: '00000000-0000-0000-0000-000000000000',
+                        account_id: accountId,
+                        category_id: finalCategoryId,
+                        description: finalDescription,
+                        description_iv: finalDescriptionIv,
+                        transaction_date: transactionDate,
+                        amount: amount,
+                        currency_code: selectedAccount.currency_code,
+                        notes: encryptedNotes,
+                        notes_iv: notesIv,
+                        creditor_name: null,
+                        debtor_name: null,
+                        source: 'manually_created' as const,
+                        label_ids:
+                            finalLabelIds.length > 0
+                                ? finalLabelIds
+                                : undefined,
+                    },
+                    { updateBalance: updateAccountBalance },
+                );
 
                 const updatedCategory = finalCategoryId
                     ? categories.find(
@@ -441,14 +380,6 @@ export function EditTransactionDialog({
                     label_ids: finalLabelIds,
                 };
 
-                if (updateAccountBalance) {
-                    await updateBalanceForTransaction(
-                        accountId,
-                        transactionDate,
-                        amount,
-                    );
-                }
-
                 toast.success(__('Transaction created successfully'));
                 if (ruleResult.ruleName) {
                     toast.success(
diff --git a/resources/js/services/transaction-sync.ts b/resources/js/services/transaction-sync.ts
index 2f11d29c..81c30865 100644
--- a/resources/js/services/transaction-sync.ts
+++ b/resources/js/services/transaction-sync.ts
@@ -63,8 +63,12 @@ class TransactionSyncService {
 
     async create(
         data: Omit<Transaction, 'id' | 'created_at' | 'updated_at'>,
+        options?: { updateBalance?: boolean },
     ): Promise<Transaction> {
-        const response = await axios.post('/transactions', data);
+        const response = await axios.post('/transactions', {
+            ...data,
+            ...(options?.updateBalance ? { update_balance: true } : {}),
+        });
         const serverData = response.data.data || response.data;
 
         const label_ids = serverData.labels?.map((l: { id: string }) => l.id);
diff --git a/tests/Feature/TransactionTest.php b/tests/Feature/TransactionTest.php
index 8a87196a..25618126 100644
--- a/tests/Feature/TransactionTest.php
+++ b/tests/Feature/TransactionTest.php
@@ -368,6 +368,123 @@ test('deleting a connected account transaction never changes the balance', funct
     ]);
 });
 
+test('creating a transaction updates the balance on its date when one exists', function () {
+    $user = User::factory()->onboarded()->create();
+    $account = Account::factory()->create(['user_id' => $user->id]);
+
+    $account->balances()->create([
+        'balance_date' => '2025-11-11',
+        'balance' => 100000,
+    ]);
+
+    actingAs($user)->postJson(route('transactions.store'), [
+        'account_id' => $account->id,
+        'description' => 'encrypted_description',
+        'transaction_date' => '2025-11-11',
+        'amount' => 2500,
+        'currency_code' => 'USD',
+        'source' => 'manually_created',
+        'update_balance' => true,
+    ])->assertCreated();
+
+    $this->assertDatabaseCount('account_balances', 1);
+    $this->assertDatabaseHas('account_balances', [
+        'account_id' => $account->id,
+        'balance_date' => '2025-11-11',
+        'balance' => 102500,
+    ]);
+});
+
+test('creating a transaction creates a balance on its date from the closest earlier balance', function () {
+    $user = User::factory()->onboarded()->create();
+    $account = Account::factory()->create(['user_id' => $user->id]);
+
+    $account->balances()->create([
+        'balance_date' => '2025-11-01',
+        'balance' => 50000,
+    ]);
+
+    actingAs($user)->postJson(route('transactions.store'), [
+        'account_id' => $account->id,
+        'description' => 'encrypted_description',
+        'transaction_date' => '2025-11-11',
+        'amount' => -1500,
+        'currency_code' => 'USD',
+        'source' => 'manually_created',
+        'update_balance' => true,
+    ])->assertCreated();
+
+    $this->assertDatabaseHas('account_balances', [
+        'account_id' => $account->id,
+        'balance_date' => '2025-11-11',
+        'balance' => 48500,
+    ]);
+});
+
+test('creating the first transaction on an account creates a balance equal to its amount', function () {
+    $user = User::factory()->onboarded()->create();
+    $account = Account::factory()->create(['user_id' => $user->id]);
+
+    actingAs($user)->postJson(route('transactions.store'), [
+        'account_id' => $account->id,
+        'description' => 'encrypted_description',
+        'transaction_date' => '2025-11-11',
+        'amount' => 7500,
+        'currency_code' => 'USD',
+        'source' => 'manually_created',
+        'update_balance' => true,
+    ])->assertCreated();
+
+    $this->assertDatabaseHas('account_balances', [
+        'account_id' => $account->id,
+        'balance_date' => '2025-11-11',
+        'balance' => 7500,
+    ]);
+});
+
+test('creating a transaction does not change the balance when not requested', function () {
+    $user = User::factory()->onboarded()->create();
+    $account = Account::factory()->create(['user_id' => $user->id]);
+
+    actingAs($user)->postJson(route('transactions.store'), [
+        'account_id' => $account->id,
+        'description' => 'encrypted_description',
+        'transaction_date' => '2025-11-11',
+        'amount' => 7500,
+        'currency_code' => 'USD',
+        'source' => 'manually_created',
+    ])->assertCreated();
+
+    $this->assertDatabaseCount('account_balances', 0);
+});
+
+test('creating a connected account transaction never changes the balance', function () {
+    $user = User::factory()->onboarded()->create();
+    $account = Account::factory()->connected()->create(['user_id' => $user->id]);
+
+    $account->balances()->create([
+        'balance_date' => '2025-11-11',
+        'balance' => 100000,
+    ]);
+
+    actingAs($user)->postJson(route('transactions.store'), [
+        'account_id' => $account->id,
+        'description' => 'encrypted_description',
+        'transaction_date' => '2025-11-11',
+        'amount' => 2500,
+        'currency_code' => 'USD',
+        'source' => 'manually_created',
+        'update_balance' => true,
+    ])->assertCreated();
+
+    $this->assertDatabaseCount('account_balances', 1);
+    $this->assertDatabaseHas('account_balances', [
+        'account_id' => $account->id,
+        'balance_date' => '2025-11-11',
+        'balance' => 100000,
+    ]);
+});
+
 test('transactions index page passes user categories', function () {
     $user = User::factory()->onboarded()->create();
     $otherUser = User::factory()->create();