Available Balance vs. Current Balance in a Bank Account: What’s the Difference?

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Knowing exactly how much money you have to spend is the foundation of personal finance. It helps you avoid overspending and keeps your budget in check. With online banking and mobile apps, monitoring your balance is a simple task — just log in for a quick view of what’s available in your account.

Sometimes the amount you see doesn’t reflect what’s actually available for you to spend. Your bank may display your current balance, which may not be the same as your available balance. Understanding the differences between these figures can help you avoid costly overdrafts.

What Is the Available Balance?

The available balance is the amount of money you have for cash withdrawals and purchases. This amount typically includes pending transactions and holds the bank places on deposits you’ve made. It does not include transactions that can take extra time to process, such as pay-at-the-pump gas purchases and restaurant bills with the tip added. The available balance does not reflect scheduled transactions like automatic payments for bills and checks that you’ve written but have not cleared.

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For credit cards, the available balance reflects all of the transactions from the previous business day that have posted to the account. To calculate the available balance, add together the current balance and all charges that have not yet been posted. Subtract this total from the credit limit.

What Is the Current Balance?

Your current balance is the amount of money in your account at the moment. It reflects all deposits, withdrawals, and purchases the bank has processed. The current balance does not include pending transactions because they have not yet posted to the account. This can be confusing because you may believe you have more money in the account than is actually there if you forget about those pending transactions.

The current balance on a credit card account is the total you owe the credit card company. It includes charges you’ve made and interest you owe at that point in time. You may notice the current balance on your credit card changes daily (and sometimes during the day) as you use the card.

Available Balance vs. Current Balance: Why Are the Amounts Different?

Since the available balance reflects pending transactions that have not posted, the amount you see may be smaller than the current balance because transaction processing times vary. For example, Bank of America, Member FDIC, makes mobile check deposits available the next business day as long as it receives the deposit before 9 p.m. ET on a business day. However, the bank credits transfers between Bank of America customers on the same day.

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In some cases, a bank will hold back a portion of a check deposit for a few days because it needs to verify the transaction. If you deposit a check from a different bank or one drawn on a foreign account, be prepared to wait. This wait time helps protect you in the event the check is returned. It prevents you from spending the money that will not be available and potentially paying an overdraft penalty. 

Can I Withdraw the Current Balance or the Available Balance?

Check the available balance before making a withdrawal or swiping your card to make a purchase. Since this amount includes pending transactions, it gives you a better idea of how much money you have to spend. However, make a note of scheduled debits and authorized withdrawals that may not be reflected in the available balance.

Say, for example, you check your balance and see $500 in the account. After buying groceries and filling the gas tank, you have $250 left. If you forgot that you set up an automatic withdrawal for your car insurance ($100) and electric bill ($200), you will be surprised when you see a negative balance in the account or get a notice from the electric company that your account is past due.

Final Take

When you know the difference between your available balance and your current balance, you have a better understanding of your finances and can avoid costly penalties for overdrawing your account. If you notice the available balance is too low to cover upcoming withdrawals, you can deposit money before those transactions hit the account. You’ll also be able to swipe your debit card with confidence, knowing you have the money available to cover the transaction at the point of sale.

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  • How long does it take a deposit to clear?
    • Most deposits clear within one business day, but you may have to wait up to five days before the deposit is available in your account. Some banks will make the first $225 of a deposit available the following business day and hold the balance until the following business day. If the account is new or has a history of being overdrawn, the bank may wait until it receives the money from the other bank before you have access to the full deposit.
  • What is the current balance vs. the available balance shown in an ATM transaction?
    • The current balance and available balance shown on the ATM screen or receipt should be the same as what you see when you log in to your account on the bank's website or mobile app. The available balance is the difference between your current balance and pending transactions that have not yet posted. The current balance is the amount of money in your account and does not reflect those pending transactions.
  • What happens if I overdraw my account?
    • Your account has insufficient funds to cover transactions if the balance falls below zero. The bank may deny charges and return checks with a note that your account doesn't have enough money to make the payment. Some banks charge a non-sufficient funds fee when this happens. Depending on the terms of your account, the bank may allow the charge to go through and charge you an overdraft fee for each item it pays while the balance is negative. If you have a checking and savings account with the bank, you may be able to link them so the bank can pull money from the savings account to pay for transactions.
    • Overdrawing your bank account is more than a nuisance. It's also big business for banks, which earn billions of dollars each year from overdraft fees they collect when balances dip below $0. These fees brought in nearly $6 billion from January to September of 2022.

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