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. In what ways has technology helped to reduce float?

    Learn more about the impact of float on the U.S. monetary system and how technology has changed the amount of float as measured ... Read Answer >>
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    Learn more about how float occurs within the United States and how it is monitored. Find out why float frequently happens ... Read Answer >>
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