Book Balance


DEFINITION of 'Book Balance'

Funds on deposit prior to any adjustment for check clearing, float funds or reserve requirements. The book balance is the term banks use to describe the amount of money available before any adjustments have been made for deposits in transit, checks that have not yet been cleared, reserve requirements and interest received from "float funds".

Also called "gross balance".

BREAKING DOWN 'Book Balance'

"Float funds" is a term used to describe interest received by banks because of the time lapse between the deposit and payment of checks. When a check is deposited in a bank, it does not get paid immediately. The time between the deposit and payment of the check serves as an opportunity for the paying bank to earn additional interest on the money.

  1. Federal Reserve Bank

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    The time period when a company will not handle adjustments to ...
  3. Reserve Requirements

    Requirements regarding the amount of funds that banks must hold ...
  4. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
  5. Bank

    A financial institution licensed as a receiver of deposits. There ...
  6. Reserve Ratio

    The portion (expressed as a percent) of depositors' balances ...
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