DEFINITION of 'Negative Float'

The period of time between when a bank customer writes a check and when it is cleared. Negative float is the difference between checks written or actual checks deposited as stated in a check register and the checks that have cleared an account according to bank records. A negative float occurs when checks are clearing faster than deposits received into the account.

BREAKING DOWN 'Negative Float'

For example, let's say Anne's balance in her check register reads $10,000 after she has written and sent out five checks of $1,000 each. However, her bank balance reads $15,000, which means that the $5,000 in checks has not been cleared by the bank yet. That $5,000 is the negative float.

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RELATED FAQS
  1. How does float affect the nation's money supply?

    Learn how float affects the appearance of the nation's money supply, and receive a brief lesson on how the U.S. government ... Read Answer >>
  2. In what ways has technology helped to reduce float?

    Learn more about the impact of float on the U.S. monetary system and how technology has changed the amount of float as measured ... Read Answer >>
  3. What months of the year typically have the highest float?

    Learn more about how float occurs within the United States and how it is monitored. Find out why float frequently happens ... Read Answer >>
  4. Why does float usually increase at the beginning of the week?

    Find out more about float and how checking float is created in the American banking system. Learn more about why the Federal ... Read Answer >>
  5. How long does it take a check to clear?

    It usually takes two days for a check to clear, but in some cases it may take longer. Discover how banks treat large deposits ... Read Answer >>
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