Closing the water budget improves the consistency of water budget component datasets, including precipitation (P), evapotranspiration (ET), streamflow (Q) and terrestrial water storage change (TWSC), thereby enhancing the understanding of basin-scale water cycle processes. Existing water budget closure correction (BCC) methods typically redistribute the entire water imbalance error (ΔRes) to achieve perfect water budget closure but often neglect the trade-off between achieving closure and the errors introduced into budget components as a result of this redistribution. This study quantifies the uncertainties introduced by existing BCC methods (CKF, MCL, MSD, and PR) across 84 basins representing diverse climate zones. We then propose a novel method, IWE-Res, to identify the optimal balance for redistributing ΔRes. This method minimizes the combined error from both introduced budget component errors and the remaining ΔRes error, while reducing the occurrence of negative values. The results indicate: (1) Existing BCC methods can lead to negative values in corrected budget components, with negative values comprising approximately 0–10 % (mostly below 5 %) of the time series; (2) Compared to existing BCC methods, the proposed IWE-Res method improves the accuracy of corrected P by 29.5 %, corrected ET by 24.7 %, corrected Q by 69.0 %, and corrected TWSC by 6.8 % based on the root mean square error (RMSE); and (3) In most basins, except in cold regions, the optimal balance is reached when 40 %–90 % of ΔRes is redistributed. By offering a more balanced approach to water budget closure, this study improves the accuracy and reliability of corrected budget component datasets.