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?

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  3. What months of the year typically have the highest float?

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  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?

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