CURRENT BALANCE VS AVAILABLE BALANCE: What’s The Difference?

CURRENT BALANCE VS AVAILABLE BALANCE
CURRENT BALANCE VS AVAILABLE BALANCE

Current balance vs available balance – If you ever made a check one day just to keep your balance smaller than you expected the next day, or if you declined a check for insufficient funds when you thought the money was there to cover the payment, the discrepancies may include the difference between current balance vs available balance.

What Is Available Balance?

Your available balance is the amount you can spend now.  To determine if there is enough money in your account to cover a transaction, we use the available balance of your account, which is based on depositing and withdrawing funds into your account and all pending electronic transactions, including pre-authorized transfers, point-of-sale transactions and authorizing merchant payments (whether or not they were posted to your account).

Sometimes you will see an available balance lower than the current one.  In these cases, you can spend only the available balance (or less if you have outstanding checks), and the rest of the money is kept by your financial institution.  The current balance includes all your money, including all available PLUS funds that are kept.

What Is Current Balance?

Your current balance is the sum of all published / selected transactions known to EECU and does NOT include pending transactions.  Pending transactions will appear at the top of your account history.

You can probably find out what your current balance is by simply checking your online account through a web browser or mobile app.  You can also get information by visiting a local bank branch and talking to the cashier or checking the ATM.

It is important to know your current balance as this gives you an idea of ​​how much money you currently have.  If you are trying to budget for the coming week or month, it will give you a broad idea of ​​how much you can spend.

However, if your current balance and available balance are different, you will want to pay attention to both, especially if you have future transactions such as direct deposits or unprocessed checks.

ALSO CHECK: WHAT IS VESTED BALANCE AND HOW DOES IT WORK?

Differences Between Current Balance Vs Available Balance

For each account listed on the account summary screen, the system displays current and available balances for deposits, as well as available credit and current balance for loans.  The definition of current and available balances may differ depending on how we handle smooth or published reminders.

Account balances are summed for loans and deposits to get a complete financial picture of your accounts.  You can click the name of each account to get detailed account information.

Current Balance

Current balance is the result of all transactions posted to your account.  The current balance on the credit account is the outstanding balance of the loan.

 Available Balance 

Available balance is the amount available to you now.  An available loan account loan is an amount that you can withdraw or borrow.

For the most part, your available balance is an accurate idea of ​​what you need to spend.  However, if you have made a debit card transaction that your merchant has not yet reported to your bank, or you still have outstanding checks, these items may not be included in your available balance.

The same goes for future payments that will be credited to your account in the next day or two but have not yet been processed.  Depending on the type of deposit, the duration of the retention may vary.  With normal maintenance, some funds may be available on the same day and the rest on the next business day or in two business days.

In some cases, for example, with new bank accounts or very large deposits, the bank may impose a so-called exception on deposits.  Exceptional delays can last longer than normal – up to five business days or even longer in some circumstances.  In this case, you need to make sure you understand when your funds will be available before debiting or withdrawing funds.

Current Balance Vs Available Balance Examples

For example, suppose your current and current balance is $50 and you use a debit card at a restaurant for $20.  Your account has been put on hold, so your available balance is only $30.  Your current balance is still $50. 

Before the restaurant fee is sent for processing, the check you issued for $40 is cleared.  Because you only have $30 (you agree to pay the restaurant $20), your account will exceed $10, even if your current balance is $50.  In this case, a check of $40 was paid. 

You will be charged an overdraft fee.  Instead of paying the $ 40 check, we could return the check and charge you for the insufficient amount.  Commissions (overdraft or insufficient funds) will be deducted from your account, which will further reduce your balance.

How To Discover Current Balance Vs Available Balance

When you browse your bank account online or communicate with the cashier of the branch, the current balance is the total amount of money stored in the account.  As you will soon learn, this may not be the most accurate idea of ​​the status of your account.

Your available balance is the amount of money in your account less loans or debts that are not yet fully posted to your account.  This is the amount of money you can spend, but it can fully reflect the money you have.

You may notice by checking the balance of your account that these two numbers do not match.  If you have recently made a debit card purchase but the financial institution has not fully processed the transaction, your current balance will be higher than your current balance.  This is also the case if you have issued a check that has not yet been issued.

You can, but you need to keep in mind the other financial transactions you have made.  Your current balance reflects all your money, as well as funds that are kept or transferred, such as checks.

ALSO CHECK: BUY TO CLOSE: Definition And Trading Guide

Current Balance Vs Available Balance Credit Card

Each credit card has a maximum balance.  Your credit card issuer gives you a credit limit, which is the highest balance you can have on your credit card at any time.  As long as you stay on good terms and stay within the credit limit, you can continue shopping up to this maximum amount.

Staying within the credit limit means always knowing your available credit.  Depending on the terms of your credit card, you may face a penalty for exceeding your credit limit, or your card issuer may simply stop accepting new payments.

The more credit you have, the better.  Having a large number of available loans has a good effect on your credit rating because you seem less risky to lenders.  A lower balance means that your credit utilization rate, which is 30% of your credit rating, will also be low. 

In general, it is best to keep your credit card balance below 30% of the credit limit.  On a credit card with a limit of $ 1,000, this means that your balance does not exceed $300, leaving an available credit of $700.

Current Balance Vs Available Balance FAQs

How Does Available Balance Differ From Current Balance?

For example, suppose your current and available balance is $100.  You use $ 10 to buy coffee in the morning.  Your current balance will still be $100, as the coffee shop transaction is still pending.  But your available balance will be $90.  So if you also had a $100 check that you mailed and it was cleared, you would have a $10 excess.  You should keep track of your current balance if you have regular payments or large purchases, as this balance is most affected by new transactions.

What Is Available Credit?

Your available credit is the amount of your credit limit that you can still use to make purchases.  The amount changes when your balance and credit limit change.  If your available credit is $0, that means you don’t have a shopping credit.  This can happen if you have exhausted your credit card, your payment has not been made, or your credit card payment is overdue.

CONCLUSION

Current balance is the balance of funds in the account of the bank owner.  The balance is calculated after all deposits, withdrawals, bank fees and other banking transactions have been accounted for and reflected in the account.

The available balance, on the other hand, is an amount that is not earmarked or held for a specific purpose.  This is the part of the current balance that is available for retrieval at the moment.  It is based on all deposits and withdrawals, as well as all pending electronic transactions, regardless of whether they have been debited / credited to a current account.

Exceeding the available balance usually means an overdraft, even if it is within the displayed current account balance.  Based on this balance, the bank calculates all overdrafts and penalties.

REFERENCES

creditkarma.com – Current balance vs. available balance: What’s the difference?

midwestcommunity.org – Difference Between Available Balance and Current Balance

corporatefinanceinstitute.com – Available Balance

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