The money in your bank account is yours, but you can't always spend it when you want to. You may already have noticed that the "account balance" and "available balance" on your ATM receipts or online bank statement sometimes give you different figures. If you keep a low bank balance, you'll need to be aware of these delays, since you may find that your debit card is rejected or autopayments are denied. You may deposit a check on Monday, only to find a payment coming through Monday night is denied due to insufficient funds.
How Your Bank Account Works
Depositing money doesn't entitle you to withdraw the cash immediately. If you deposit an out-of-town check, for instance, the bank may list it in your account balance, but the money isn't available until the check clears. Some banks also distinguish between current account balance -- that is, your available balance at the start of the day -- and available balance: Your current balance stays the same throughout the day, but your available balance changes if, for example, you make an ATM withdrawal.
Available Balance Rules
Even cash deposits may not become part of your available balance when you make them. Federal law says banks can keep a cash deposit out of your available balance until the following business day, but no longer. Cashier's checks and electronic checks also have "next day availability." Local checks must enter in your available balance within two days and out-of-area checks within five, unless the check bounces. Your bank can use a shorter holding period if it chooses.
Available Balance Exceptions
Some deposits take longer to enter your available balance. If you deposit a non-local check larger than $5,000, the bank can take an extra day to make the money above $5,000 available. The bank can also impose a slowdown if you have a history of overdrawing your account. It can also take extra time if there's a potential problem to collecting -- for example, if you deposit a check that's six months old or a post-dated check.
Things to Keep in Mind
Keeping good records is the best way to track your available balance. When you use an ATM, record your withdrawals so that you know your available balance has gone down. If your account is set up for automatic payments, write reminders to yourself to subtract the money on the day the payment comes due. Know your bank's hold policy so that when you make a deposit, you know how long you have to wait before it increases your available balance.