DEFINITION of 'Available Funds'

Available funds is the amount of money that is in your bank account and available for immediate use. 

BREAKING DOWN 'Available Funds'

Available funds are sometimes lower than the account balance — the total amount you have in your account that includes any pending transactions or other amounts yet to clear, such as checks — because it can take several days for deposits or pending withdrawals and authorizations, such as through online billing, to show up in an account. 

It typically takes about two business days for a deposited check to clear, and about five business days for the bank to receive the funds. However, depending on the amount of the check, you may have access to the full amount in two days. Some banks make a portion of the check available immediately or within one business day. For example, your bank might make $150 or $200 of a $500 check available immediately, or within one business day of the deposit, and make the balance of the check available in two days.

Banks place a hold on your deposits because they first want to know if they are legitimate and whether any checks will bounce. While all national banks and federally chartered credit unions are subject to the same hold rules, financial institutions can release your funds sooner, at their discretion.

RELATED TERMS
  1. Immediate Credit

    Immediate Credit is the Federal Reserve practice of "clearing" ...
  2. Available Balance

    The available balance is the balance in checking or on-demand ...
  3. Availability

    Availability refers to funds that have been deposited by third-party ...
  4. Cleared Funds

    Cleared funds are the balance in an account that is able to be ...
  5. Availability Float

    Availability float refers to the time period between when a deposit ...
  6. Bank Deposits

    Bank deposits are money placed into a deposit accounts at a banking ...
Related Articles
  1. Small Business

    Best Checking Accounts For Small Businesses

    What you need to know to choose the best checking account for your small business – and where to look.
  2. Personal Finance

    Where to Put Your Cash: Call Deposit vs. Time Deposit Accounts

    Time deposit accounts and call deposit accounts allow customers to earn higher interest in exchange for less access to their cash.
  3. Personal Finance

    The 8 Best Bank Perks

    Many banks are now offering free perks to entice new customers.
  4. Personal Finance

    10 Bank Promotions That Pay You to Open an Account

    Find out which banks are running cash promotions and will pay you just for opening a new account.
  5. Tech

    5 Useless Financial Products That Will Disappear Soon

    Bank deposit slip: what's that? Everyday tools of our financial life that went from indispensable to obsolete.
  6. Investing

    Best Checking Accounts for Small Businesses

    Accounts with big banks offer frills, such as mobile and text-based banking but for smaller businesses, local banks and credit unions can save money.
  7. Personal Finance

    What Else Banks Can Help With (Besides Banking)

    As competition increases and technology advances, banks, credit unions and savings institutions are offering more services intended to attract customers.
  8. Personal Finance

    Handling High-Yield Savings Accounts

    Is a high-yield savings account right for you? Read on to find out what they have to offer.
RELATED FAQS
  1. How liquid are money market accounts?

    Understand the characteristics that distinguish money market accounts from checking, savings account and money market funds ... Read Answer >>
Trading Center