What does available balance versus current balance actually mean?

Available Funds

Do you ever wonder why your account balance online shows an amount different than what you think it should be, or you see different balances as “actual” and “available”? Simply stated, your “available balance” is the amount of money in your account to which you have immediate access.

Your available balance will be different from your current balance if the financial institution has placed a hold on a deposit or if an authorized credit or debit card transaction has not yet cleared. This means there are pending transactions that have been presented against your account but have not yet been processed.
Your current balance shows posted (processed) transactions including any recent payments made to or from your account. Your current balance will be updated when your pending transactions are posted to your account which sometimes can take up to five business days. Once processed, the transactions are reflected in the current balance and shown in the account history.

All national banks and federally insured credit unions are subject to the same “hold” rules through Available Funds Policy regulations. However, financial institutions can release your funds sooner, at their own discretion. Financial institutions are also required to include a notice of funds availability in their branches.

So how long does it take for my “available balance” to become my “current balance”?
It typically takes about two business days for a deposited check to clear (be processed), and about five business days for the bank to receive the funds. However, depending on the amount of the check, you may have access to the full amount in two days. Some banks make a portion of the check available immediately or within one business day.

When financial institutions place a hold on your deposit, you will receive a notice telling you when the funds will become available. Funds are applied to your current balance and begin accruing interest immediately, however, these funds are not part of your available balance and may not be used for transactions. The length of the hold depends upon the type of deposit you have made.

So can I use my “current balance”?
It is important to note that you should never plan to spend funds beyond your available balance. A transaction requiring funds beyond your available balance could result in a declined purchase or bounced check.

If you need additional information about how your financial institution handles making your funds available, ask them for their Funds Availability Policy document.

What does available balance versus current balance actually mean?

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