When you look at your bank account through an online portal, you may see two different balances for the account: the current balance and the available balance.

The current balance of your account is the total amount of money in the account.

The available balance of your bank account is the amount of money that you can access and use from the account.

In many cases, the available balance will match your account’s current balance, but in some cases, the available balance may be less, meaning you cannot use all of the money you have in the account.

Why your available balance may be different from your current balance

There are a few reasons why your account’s available balance may not match up with its current balance, including:

You may have transactions pending in the account. For example, if you have $500 in your account and swipe your debit card to buy a $10 lunch, the merchant won’t immediately remove that money from your account. Instead, the transaction may take a day or two to clear. Until the transaction clears, the current balance of your account will be $500, but the available balance will be $490.

Merchants may also authorize a transaction up to a certain amount before withdrawing the amount you actually owe. For example, a restaurant may use your debit card to authorize a transaction up to $50, even if your meal only costs $30, to account for any tip you may add. Until the transaction goes through, this will reduce your available balance by $50.

Once the restaurant processes your transaction, it will remove the $50 hold, instead asking your bank to pay the cost of the meal plus any tip you authorized. This type of hold is also common at gas stations where you swipe your card before you know how much gas you’ll put in your gas tank.

What can you do with your available funds?

The available funds in your bank account includes all of the money that you can access and use freely. You can do almost anything you desire with available funds, including:

  • Withdraw it from an ATM
  • Withdraw it in-person at a bank
  • Spend it using a debit card
  • Send it to a friend using a peer-to-peer transfer app
  • Write a check against your account
  • Pay a bill online

You cannot do any of these things with money that is included in your current balance, but not your available balance. That makes it essential to keep track of your available balance as it compares to your current balance.

If you try to spend more than you have available, you could bounce a check, overdraft your account or have a transaction declined.

Deposits not credited

Differences in current and available balance can also happen when you make a deposit. For example, your bank might not make all of the money from a check deposit available at once.

If you have $500 in your account and deposit a $1,000 check, your bank may only make the first $200 available immediately. The current balance will show $1,500 but the available balance will just be $700. As the bank processes the check transaction with the paying bank, it will make the rest of the money available for you to spend.

How much of a deposit a bank makes available immediately, and how quickly the bank makes the rest of the deposit available, depends on a variety of factors.

In general, banks are more hesitant with new checking customers. If you’ve only had your account open for a few days or weeks, the bank may take longer to make the full amount of your deposit available because it wants to clear the transaction with the paying bank.

Banks will also be more careful with larger deposits. Longer holds are common for check deposits exceeding $5,000.

These holds are designed to help protect you against fraud. If you deposit a fraudulent check, the bank will deduct the amount of the deposit from your account when it discovers that it can’t collect on the check you deposited.

If the bank made those funds available immediately and you spent them, then you might not have enough money in your account to return to the bank. This would drive your account balance into the negative.

If you want to know how long it will take for your money to become available, you can check your bank’s fund availability policy. This policy will outline how long the bank takes to process deposits and make the money available for your use.

Bottom line

Your bank accounts have two separate balances: the current balance and the available balance.

For checking accounts, the important balance to track is your available balance. This number shows the amount of money  you can withdraw and spend from the account and may be less than the current balance.

Understanding your spending power is important because it can help you avoid accidentally overdrafting your account and incurring hefty fees, or having a transaction declined.

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