Float Time
 |
Definition of 'Float Time'The amount of time between when an individual writes and submits a check as a payment and when the individual's bank receives the instruction to move funds from the account. Before the implementation of the Check Clearing for the 21st Century Act (Check 21), the average float time was two to four days, but now most checks are cleared within a day. |
 |
Investopedia explains 'Float Time'Prior to Check 21, individuals would sometimes take advantage of long float times and send out checks despite not having enough money in their accounts to cover the value of the check. This can give creditors the impressions that payment was available despite the fact that the individual did not have the funds when he or she actually wrote the check.Individuals who attempt to use a check's float time in the manner previously described should be aware that doing so will likely result in a number of bounced checks as float times have become dramatically shorter because transferring checks in electronic format has hastened the clearing process. |
Related Definitions
Articles Of Interest
-
The Beauty Of Budgeting
Make it to the end of the month, before you run out of money. -
Your First Checking Account
This owner's manual will show you what to expect from your bank. -
If I want to have some cash in a liquid account for unexpected emergencies, what is best? A savings account or another type?
It's always a good idea to keep some money set aside in a liquid form, but it's a double-edged sword, because the more liquid your money, the less it's earning. If you never have an emergency, ... -
3 Banking Moves You Should Make Before Traveling
Putting your finances in order should be one of your top priorities before traveling out of the country. -
Clearing Up Tax Confusion For College Savings Accounts
Put your kids through school without being hounded by the tax man. -
Besides a savings account, where is the safest place to keep my money?
Savings accounts are safe because investors' deposits are guaranteed by the Federal Deposit Insurance Corporation (FDIC) for bank accounts or the National Credit Union Administration (NCUA) for ... -
Changes To Your Checking Account
Checking accounts have evolved a lot over the years. Here are the five biggest changes that can affect your wallet. -
The Most Costly Banking Mistakes You Can Make
With changing and increasing fees, it can be difficult to avoid bank charges, but investing time in finding out what your bank charges, and when, can help you save money. -
Why should I pay myself first?
The concept of "paying yourself first" is one of the pillars of personal finance and considered the golden rule by many financial planners. The basic idea is simple to understand. As soon as ... -
How To Invest On A Shoestring Budget
Money is tight when you're young, but don't let that stop you from pursuing future riches.
Free Annual Reports
