Clearing House Funds


DEFINITION of 'Clearing House Funds'

Money that passes between Federal Reserve Banks in the form of personal or business checks prior to approval of credit. These funds are in the process of clearing and reconciliation through a central processing mechanism. Because of this, they are often not available for withdrawal on the day of deposit.

BREAKING DOWN 'Clearing House Funds'

Clearing house funds differ from federal funds, which settle on the same day. Because clearing house funds are not drawn on reserves like federal funds, they generally take at least three days to clear. Clearing house funds are also used to settle any transaction on which there is one day's float.

  1. Float

    Money in the banking system that is briefly counted twice due ...
  2. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  3. Check Routing Symbol

    A set of numbers appearing as the denominator of a fraction that ...
  4. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  5. Federal Funds

    Excess reserves that commercial banks deposit at regional Federal ...
  6. Bank

    A financial institution licensed as a receiver of deposits. There ...
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