Clearing House Funds

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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 ...
RELATED FAQS
  1. What does CHIPS UID mean?

    CHIPS UID stands for Clearing House Interbank Payments System Universal Identifier. This is just a fancy name for an electronic ... Read Full Answer >>
Related Articles
  1. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  2. Options & Futures

    Choose To Beat The Bank

    From internet banking to credit unions, it's in your power to cut fees and maximize service.
  3. Personal Finance

    Cut Your Bank Fees

    Find out how to get the bank to pay you for using their services, not the other way around.
  4. Economics

    What’s Driving U.S. Stocks? Irony.

    A seesaw week for U.S. stocks ended on the upside last week, though the rally was more a function of slow growth rather than a booming economy.
  5. Economics

    What Do You Need To Know About Inflation?

    When it comes to inflation, there is no shortage of opinions: one side argues the Fed should raise rates, and the opposition says the Fed should stay put.
  6. Economics

    Worried About The Fed Hike?

    With the Nasdaq crossing the threshold and the broader equity bull market entering its 7th year, many investors are anxious that stocks are in a bubble.
  7. Bonds & Fixed Income

    How Rate Hikes Will Affect Your Investments?

    An interest rate hike by the Fed, which will happen either during their June or September meeting, could impact your fixed income investments.
  8. Economics

    What's The Impact On Equities If The Rates Hike?

    The Fed is on course for raising interest rates. True, that leaves the question of when (most likely June or September, but could be later) and how much.
  9. Investing

    Are You Ready To Invest In The Tech Sector?

    Tech stocks, particularly those of mature tech companies, are well positioned and offer meaningful upside potential in the near-term.
  10. Investing

    The Impact Of A Stronger Dollar In The Markets

    The economy continues to improve, but also demonstrated that some areas of the stock market are more vulnerable to an increase in interest rates.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center