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 >>
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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?

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