Availability Float

DEFINITION of 'Availability Float'

The time period between when a deposit is made and when the funds become available in an account, specifically relating to check deposits. The availability float exists because banks have to process physical checks before releasing funds, meaning that the depositor has to wait before funds appears in a bank account. Companies can reduce an availability float by moving to an electronic payment system, as this reduces the reliance on a bank's processing speed on physical checks.


The difference between the availability float and a payment float is referred to as the net float.

BREAKING DOWN 'Availability Float'

For example, a printing company has $50,000 deposited in a bank and is owed $10,000 by one of its clients. The printing company cashes the $10,000 check and adjusts its ledgers to indicate that it has $60,000. Until the deposit is complete, the printing company's bank account will still show it has $50,000 available. The $10,000 is the availability float.




RELATED TERMS
  1. Book Balance

    Funds on deposit prior to any adjustment for check clearing, ...
  2. Float

    Money in the banking system that is briefly counted twice due ...
  3. Negative Float

    The period of time between when a bank customer writes a check ...
  4. Float Time

    The amount of time between when an individual writes and submits ...
  5. Available Balance

    Balances in checking or on-demand accounts where there is a delay ...
  6. Federal Reserve Float

    Refers to the over-estimation of the country's money supply due ...
Related Articles
  1. Investing Basics

    Floating Stock

    Floating stock is the number of a company’s shares that are available for the public to buy and sell.
  2. Investing Basics

    Calculating Floating Stock

    Floating stock is the number of shares a company has available for trade in the open market.
  3. Savings

    Explaining Term Deposits

    A term deposit (more often called a certificate of deposit or CD) is a deposit account that is made for a specific period of time.
  4. Investing Basics

    Float

    Float is money in the banking system that is briefly counted twice due to delays in processing checks.
  5. Savings

    Where To Put Your Cash: Call Deposit Vs Time Deposit Accounts

    Time deposit accounts and call deposit accounts allow customers to earn higher interest in exchange for less access to their cash.
  6. Investing Basics

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  7. Term

    How Time Deposits Work

    A time deposit is an interest-bearing bank deposit that has a specific maturity date.
  8. Savings

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  9. Savings

    What is a Demand Deposit?

    A demand deposit is any type of account where the money in the account may be withdrawn at any time without prior notice to the financial institution.
  10. Savings

    2015's Top Checking Account Promotions

    Open a checking account in 2015 and the bank could give you a cash bonus. Check out these top offers.
RELATED FAQS
  1. How does float affect the nation's money supply?

    Learn how float affects the appearance of the nation's money supply, and receive a brief lesson on how the U.S. government ... Read Answer >>
  2. What is the difference between holdover float and transportation float?

    Find out about float, which may become a thing of the past due to the steady decline of check writing and new services in ... Read Answer >>
  3. What months of the year typically have the highest float?

    Learn more about how float occurs within the United States and how it is monitored. Find out why float frequently happens ... Read Answer >>
  4. Why does float usually increase at the beginning of the week?

    Find out more about float and how checking float is created in the American banking system. Learn more about why the Federal ... Read Answer >>
  5. In what ways has technology helped to reduce float?

    Learn more about the impact of float on the U.S. monetary system and how technology has changed the amount of float as measured ... Read Answer >>
  6. What does floating stock tell traders about a particular stock?

    Learn about what floating stock tells a trader about a particular stock. One commonality of the biggest winners in stock ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center