Available balance

Often people are confused when they encounter a difference between the current balance on their savings account and the listed available balance. The available balance of an account is the balance of an account less any holds, uncollected funds, and restrictions against the account. The available balance on an account is the exact amount that can be used immediately. On the other hand, the current balance on the account includes all funds including those that may still be on hold, are uncollected, and restricted from being used.

A case when funds may still be on hold or are uncollected would be when a check is deposited. Some checks may take hours to clear while others, especially if a check from another bank, may take days. This means that while the bank has noted that you have deposited the check, until that check clears, the amount on that check will added only to the current balance. It will not reflect on the available balance since it cannot be withdrawn or used in any other way yet.

Another example would be if restrictions, which can be specified by the account owner or the bank, were in place. In case there is an automatic payment set up for the account, the account owner may ask the bank (if available as an option) to put a minimum amount on hold each month to ensure that there are enough funds for the payment come payment due date, which will automatically lower the balance available on the account.

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