DEFINITION of 'Cleared Funds'

A balance in an account that is able to be withdrawn or used in financial transactions. Until funds are considered to be cleared funds they are considered to be pending, and investors or customers will be unable to conduct transactions with them.

BREAKING DOWN 'Cleared Funds'

When cash or checks are deposited into an account, either as an account funding transaction or as the result of the sale of a security, it may take several days until the financial institution is able to make all of the funds available for withdrawal or trading. Often, larger deposits may require a longer period of time to clear than smaller ones, especially if the size of the deposit requires a financial institution to comply with government regulations.

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