What Is Availability?
Availability refers to funds that have been deposited by a third-party check into a customer's bank account. These funds are typically not usable by the customer until the check clears, or they become "good funds." The amount of time a third-party takes to clear often depends on a few factors.
- In terms of banking, availability means deposited funds in the form of a third-party check into a customer's bank account, usually a checking account.
- This type of deposit is not usable until the check clears, or the bank allows them to be called "good funds."
- According to the Federal Reserve's Compliance Handbook, the first $100 must be made available upon deposit, unless the check was deposited via a nonproprietary ATM.
- Pending checks may show up in your bank account as part of the total balance in your account, but those funds will not be part of your available balance.
Third-party checks are available according to a schedule that relies on the bank's location on which the check is drawn. The maximum number of days that a check can be on hold is set by the Expedited Funds Availability Act, assuming the check is good. In addition, credit unions and banks often have their own rules for when you can use the funds presented in a third-party check. Examples of availability and rules of banking can be found on the U.S. Federal Reserve Board's website.
Example of Availability
Consider the following: If customer James Smith deposits a $5,000 certified check to his bank teller at 9:00 a.m. on a Monday, the funds would be available on Tuesday. If he deposited at an ATM, the first $100 must be made available by Tuesday at the latest, and the remaining funds must be made available by Wednesday because it is a certified check.
If you make a deposit in cash, the funds are usually made available upon receipt of the deposit, unlike when you deposit a third-party check.
According to the Federal Reserve Board, if the customer deposited at a non-proprietary ATM, the funds may be held until the following Monday, the fifth business day, and the requirement to make the first $100 available one day prior does not apply.
If you need to know when a check will clear, you can ask your teller, who will usually be able to let you know when all funds will become available. The confusion around availability can happen when a customer makes a deposit and assumes it is available immediately upon receipt.
Another example, if you check your bank account online after depositing a third-party check, you will often see the funds as part of your current balance, but not in your available balance. The current balance contains all the money, even the pending deposit. The available balance is the money in your bank account can immediately access and use.
There are specific circumstances that a bank or credit union may place a longer-than-usual hold on a deposit. For example, if you deposit over $5,000, it can take longer for the funds to become available. The same is true if you make a deposit at an ATM that is not connected to a bank or a credit union, like the kind of ATMs often found at gas stations or in stores.