Whether you’re planning to buy a house or just want to get an accurate picture of your bank account balance, it’s important to understand the difference between current balance and available balance.
Available balance is the amount of money you have available to spend without incurring overdraft fees. This number is based on transactions that have already been processed and posted to your account.
If you are a bank account holder, you may be familiar with the terms “current balance” and “available balance.” Both of these numbers provide important information about your checking or savings accounts. However, they have a few differences that make them useful in different ways. Understanding the difference between these two balances is crucial to understanding your financial health and avoiding unnecessary fees or bounced checks.
The current balance is a compilation of all credits and debits within your account at any given time. This includes all transactions that have been fully processed on both sides of the account and posted to your bank account.
It does not include any pending transactions, which can be deposits that haven’t yet been posted or withdrawals that haven’t been cashed. It also does not include any pending payments or pre-scheduled debit card purchases.
Available balances, on the other hand, exclude any pending transactions from your bank account, which gives a more accurate reflection of how much money is still available to spend. This is especially helpful if you have a large purchase or a recurring payment to make in the near future.
Generally, a customer’s available balance will match their current balance, but this is not always the case. If there are pending transactions that haven’t been processed, such as a check that is deposited but hasn’t yet been cashed or an online purchase that hasn’t been cleared by the financial institution, it can take up to two to five business days for your available balance to sync back up with your current balance.
The current balance reflects the amount of money in your bank account at any given time. It includes all pending debits and credits that haven’t cleared yet. It may also include holds put on deposits that aren’t expected to clear within a certain amount of time.
Your available balance, on the other hand, reflects only the money in your account that is immediately accessible for purchases and withdrawals. It excludes pending debit card transactions or check holds that haven’t been cashed and deposits that haven’t posted to your account. It’s the number you want to rely on when making payments or determining your spending power for the day.
You can view your available balance and the monthly starting balance on your online statement. It’s a great way to get an overview of your finances and see where your money is going. You can also compare your available balance to the incoming and outgoing transactions that have been recorded on your online statements.
However, it’s important to know that both your current balance and your available balance can be affected by a pending transaction or hold on your account. This can lead to discrepancies between them, which can be confusing and frustrating.
This is why it’s important to understand the difference between your current balance and your available balance so that you can make more informed decisions about your budget and avoid overdrawing your account. In fact, understanding these two numbers can help you stay ahead of hefty fees and overdraft charges that are sometimes associated with checking accounts.
Many people confuse the terms “current balance” and “available balance,” but these are not the same thing. The former is the amount of money you have in your account at any given time, and the latter is the amount you can spend without incurring additional fees or charges.
The available balance is the total amount of money you can use to make purchases and withdrawals, excluding pending transactions or check holds. The available balance is important to understand because it helps you avoid overdrafting your account.
Often, a discrepancy between your current balance and the available balance is caused by pending transactions or holds that are still in process. For example, a transaction you’ve made with your debit card may show up as pending even though the merchant hasn’t yet submitted it for payment.
Also, if you write a check that you aren’t sure of, the bank may hold it until you can verify it and get it deposited into your account. This can take a few hours to several days, depending on the bank and the check.
However, once the transaction is deposited into your account, the funds should appear as part of your available balance. This is especially true if you write a personal check, which is valid for up to six months or 180 days.
Overdraft fees are fees that financial institutions charge when a customer spends more money in a single day than they have available in their checking account. This can happen when customers make deposits and withdrawals, use a debit card or set up automatic payments from their checking account.
Generally, overdraft fees can cost you $35 or more per transaction and can be a huge hassle to deal with. While some banks have a grace period to bring your account balance back up before they apply overdraft fees, you can also prevent them from occurring by monitoring your spending.
One of the most important things you can do is track your spending every day, including every check and debit card purchase, cash withdrawals at ATMs, and recurring payments like car payments or gym memberships. This will help you stay on top of your spending, and it may even lead to you getting a refund on overdraft fees.