A checking account’s balance is the total amount of money in the account at any given time. The available balance is the amount of money that is currently available to spend or withdraw. The difference between the two balances may be due to pending transactions or checks that have not yet cleared. It’s important to understand the distinction between these two balances when monitoring your bank account.
What is Balance?
Balance in a bank account refers to the amount of money that is available to the account holder. This includes money that has been deposited into the account, as well as any interest that has accrued. The balance may also reflect any outstanding checks or debit card transactions. In most cases, the account holder can view their balance online or through their bank’s mobile app.
The account balance is important because it represents the funds that are available to cover future check payments or withdrawals. For this reason, account holders should regularly monitor their balance and keep track of their spending. By doing so, they can avoid incurring fees or overdrawing from their account.
What is Available Balance?
Available Balance is the amount of money in your account that is available to you to use. This includes any funds from deposits that have been made and any funds that have not yet been allocated to pending transactions. Available Balance also includes any credit that may be available to you, such as a line of credit or overdraft protection. To calculate your Available Balance, simply subtract any outstanding checks and pending transactions from your current balance.
Available Balance is important because it represents the funds that you have access to at any given time. Therefore, it is important to always know your Available Balance before making any withdrawals or transfers from your account. Additionally, some banks may charge fees if your Available Balance falls below a certain threshold, so it is important to keep track of your Available Balance to avoid costly penalties.
Difference between Balance and Available Balance
When you check your bank statement or log in to your account online, you will typically see two balances: your balance and your available balance. Your balance is the total amount of money in your account, while your available balance is the amount of money that is actually available for you to spend. The difference between these two balances is typically made up of pending transactions, such as checks that have been written but not yet cleared. Knowing the difference between your balance and your available balance can help you better manage your finances and avoid overdrawing your account.
Conclusion
The balance on your account is the total amount of funds you have available to spend, while the available balance is the number of funds you currently have available to spend. It’s important to understand the difference between these two balances so that you can make informed decisions about how to use your money.
