Checking your bank account could show you a few different numbers, including your available balance and your current balance. Your current balance and your available balance don’t always match. Knowing the difference between these two is important for how you manage your money.
Current balance vs. available balance explained
Your current balance reflects the amount of money in your bank account at any given moment. Your available balance is the amount of money you have to spend, including any pending payments and deposits.
The key difference is that your pending purchases do not appear in the current balance. That’s why these two balances can be out of sync.
If you clean out your bank account based on your current balance, you can overdraw your account and face fees. Use your available balance number to know what you can spend and avoid overdraft penalties.
Why is my available balance different from my current balance?
Your available balance differs because it includes pending transactions and your current balance doesn’t. A pending transaction has been authorized but hasn’t been posted to your account, and a posted transaction has been fully processed.
If your bank hasn’t fully processed a debit card purchase, you may see that your current balance will be higher than your available balance. This can also happen if you’ve deposited a check that hasn’t yet cleared. It’ll take a couple of days for that check to clear, and once it does, that money will be part of your available balance.
Your available balance is a better figure than your current balance to judge how much money is in your account. But monitor your available balance for large or recurring payments because that balance is most affected by new transactions.
Don’t be too worried if your balances aren’t the same. Because transactions — both incoming and outgoing — happen regularly, these balances are bound to change as well.
Going off your available balance — and thinking about whether you’ve got outstanding checks and payments before you spend — can help you avoid overdrafting your account and facing fees. This could leave you in the negative and owing the bank.
Why is it taking so long for my available balance to update?
Transactions that haven’t been fully posted to your account can take up to three business days to clear. However that time frame can vary based on factors such as the bank or card issuer, the payment network, and the type of transaction.
Here’s a general idea of how long you can expect certain types of pending transactions to take:
- Cash deposit: The next business day
- Check deposit: Within two business days
- Credit card purchase: Up to three days
In some cases, a portion of a deposit may be unavailable for some time while your bank validates the check.
If you’re ever worried about a pending transaction or why money isn’t showing up in your available balance, contact your bank to ask. Holidays and weekends, for example, can cause delays. Keep this in mind as you manage your transactions.
Frequently asked questions (FAQs)
You might overdraw your account if you spend based on your current balance, which excludes pending purchases. If you’ve opted in for overdraft protection, your financial institution can cover shortages on your checking account typically for a fee. Check with your bank about the terms and conditions of any overdraft protection programs it may offer.
In some cases, your available balance may appear higher than your current balance. The available balance may reflect a refund or an overdraft protection buffer, for example.
Your available balance is usually the lower of the two figures due to pending payments. If you’re struggling to understand why your current and available balances differ, contact your bank for help with finding the discrepancy.
The best way to avoid overdraft fees is to make spending decisions based on your available balance, which includes pending payments and deposits. Check your balance daily for the most up-to-date total because pending transactions can change it quickly.
Your available balance can adjust daily, depending on the financial institution and the type of transaction. Deposits will increase your available balance, and withdrawals and purchases will reduce it. Remember to account for checks that haven’t been cashed as well as scheduled bill payments and debits.
