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.

  1. Float

    Float is money in the banking system that is briefly counted ...
  2. Available Balance

    The available balance is the balance in checking or on-demand ...
  3. Federal Reserve Float

    Refers to the over-estimation of the country's money supply due ...
  4. Book Balance

    Book balance is a term used to describe money available after ...
  5. Check Hold

    A check hold denotes the maximum number of days that a bank can ...
  6. Cleared Funds

    Cleared funds are the balance in an account that is able to be ...
Related Articles
  1. Investing

    A Guide to Bank Accounts

    Find out which type of bank account suits your specific needs.
  2. Personal Finance

    The 8 Best Bank Perks

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

    10 Bank Promotions That Pay You To Open An Account

    Find out which banks are running cash promotions this summer.
  4. Personal Finance

    Best Checking Accounts For Couples

    Being a couple, especially if you both have jobs, can help you qualify for benefits and fee waivers that would be tougher to get on just one salary.
  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. Personal Finance

    10 Checking Accounts the Ultra Rich Use

    These accounts – created specifically for the wealthy – come with special extras such as personal bankers, waived fees and the option of placing trades.
  7. Investing

    The Best Small Business Checking Accounts in 2016

    Accounts with big banks offer frills, such as mobile and text-based banking – but for small businesses, local banks and credit unions can save money.
  8. 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.
  9. Personal Finance

    The Ins And Outs Of Bank Fees

    These service charges could nickel and dime you right out of your nest egg.
  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. 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 >>
  3. What is the difference between holdover float and transportation float?

    Find out about float, which may become a thing of the past due to the steady decline of check writing and new services in ... Read Answer >>
  4. When do checks expire?

    There is a legal grace period for cashing checks, but depositors and issuers may risk overdraft fees if a late check is presented ... Read Answer >>
  5. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center