What Is Available Account Balance?

Your available account balance tells you how much you can actually spend from your account. For instance, if you start the day with $1,000 and swipe your debit card at the grocery store for $100, your available balance will be $900, even though the transaction may take a day or two to clear.

Depositing a check can also affect your available balance. Most banks and credit unions allow access to the full amount the next business day if the check deposit doesn’t exceed $200. If it does, you’ll likely have access to $200 the next business day, with the rest available the day after.

It’s important to note that your bank won’t know if you’ve written checks that haven’t been cashed yet. If you’ve recently paid a bill by check, that withdrawal won’t be included in your available balance until the receiving party cashes it.

What Is Present Account Balance?

Your present account balance, sometimes called the current balance, shows how much money is currently in your bank account. However, it doesn’t consider pending transactions, which can take up to three business days to clear. This means your present balance will probably be higher than your available balance, and basing your spending on this number could cause you to overdraw your account.

Understanding Available Balance vs. Present Balance

Let’s say your available balance and present balance are both $2,000. When you log into your bank’s website or mobile app, you see the following pending withdrawals:

• $1,200 rent check that’s been cashed but hasn’t cleared yet
• $200 spent at the grocery store
• $50 spent at the gas station

While your present balance would still be $2,000, your available balance—or how much you can actually spend—would be $550 because it accounts for those pending transactions.

Which Balance Should You Pay Closer Attention To?

Your available balance is crucial because it can help you avoid overdraft fees by putting boundaries around your spending. If you want to know how much you can spend with your debit card or take out at an ATM, look at your available balance.

Your present balance includes all deposits and withdrawals that have cleared your account. It can be useful for budgeting, especially if you’ve deposited checks and are waiting for them to clear. Just make sure your bank processes them before you spend that money.

Current Balance vs. Statement Balance on Credit Cards

Credit card balances work a bit differently. Your card’s statement balance is the amount you owe at the end of a billing cycle. Your current balance, on the other hand, is your total outstanding balance as of today. Pending transactions can reduce your available credit but may not be included in your current balance.

The Bottom Line

Money continually moves in and out of your bank account. Your available balance and present balance tell you two different things, but both are important to your financial wellness. As pending transactions are processed and cleared, these two balances should sync up.

Regularly logging into your bank account can help you stay up to date on your transactions and available balance. It might also help you spot fraudulent charges so you can dispute them.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate your financial journey with ease and confidence.