If you often look at your bank account you may have noticed that you have two balances instead of just one, you have your current and available account balances.
However, some of us are not totally sure of what the difference is between these because sometimes they’re the same, and sometimes they are not. Most of us just ignore it and carry on with our lives, assuming the bank knows what’s going on.
However, you should pay attention to these because if they’re not the same, you should pay more attention to one of them when you are making purchases.
Both of these numbers will provide you with important information about your bank account and how you are doing with your finances. However, they also differ in a big way as well.
We don’t let you sit in the dark about the differences between account and current balances, instead, we will tell you everything you need to know, differences, and how you keep track of both of these things.
What’s The Difference?
Your current balance is the total amount of money that you have inside your account at the moment. However, this does not mean that this money is all available to spend.
Some funds in your current balance could actually be from a deposit you have made, a check you have written, or purchases you have made that have not actually been cleared yet.
Alternatively, there is your available balance, this is your current balance but without any debits or holds which have not been taken out yet. Basically, this money is the money that is available to you to spend.
If you do not have any pending transactions or holds then these two balances will then be the same.
However, if you use this account regularly then these two may often be different.
»Current Balance: Things To Know
So, what should you know about current balances? You should be able to find this easily if you have an online banking account, it should be available to you through your browser or app. If not you can find out by visiting your local branch or using an ATM.
Knowing your current balance gives you a vague idea of how much money you have. If you are the kind of person who knows the importance of budgeting then you will be able to get an idea of your budget and how to spend from your current balance.
However, if your current and available balances are different you will need to note both down, especially if you have any transactions due to exit your account.
»Available Balance: Things To Know
You can check for your available balance in the same ways that you check for your current balance. Your available balance can often be different from your current balance, especially if you use this account a lot.
If you deposit a check then the bank might hold it while they verify that it is good, and they have received the funds from the bank that issues this. These are known as holding policies, and they vary from bank to bank. Check with your bank if you are unsure of yours.
When it comes to debits, this is when you have used your card to make a purchase but the bank is yet to complete the transaction. It can show up as being a pending transaction in your account.
As this happens you will have a current balance that does not reflect that this money will be exiting your account yet, but the available balance does reflect this.
You will still only be able to spend the amount you have in your account, as long as the transaction goes through.
You should always pay much mind to your available balance as these is the funds you actually have available. If you have automated payments you should be aware of these. If a payment is more than your available balance you could end up in an overdraft.
Which Should You Pay Attention To?
If you are making payments or if you have a payment due to come out of your account soon, you will want to refer to your available balance to determine just how much money you actually have to spend.
Available balance gives you a true idea of what you actually have to spend in your account, whereas the current balance does not (unless they are the same). If you pay attention to your current balance instead of your available balance then you can dig yourself a hole.
You could end up with Non-sufficient funds fees (NSF fees), or it could trigger your overdraft, and then you have to pay overdraft fees as well. So, we recommend always paying the most attention to your available balance, and less to your current balance.
Related Resource: What Are the Best Alternatives for the Banks in Portland Oregon?
How Long For Current To Become Available?
How much time it will take for these two balances to synchronize depends on the specifics, including the amount of processing time that is required for a specific transaction to be completed.
These times can vary a lot depending on what type of transaction it is, and how quickly the establishment receives it. A part of this is on you as well.
This means that your ability to stop yourself from spending even more and adding on even more pending payments to your account will be a factor in how much time it will take for these two balances to match up again.
Typically, pending payments can take only 24 hours, or as much as 3 days to be processed and added to your account.
The whole process of transactions means there has to be communication and confirmation between your bank and the receiving bank.
If a transaction is still pending for a week then you should always contact the bank or the merchant you purchased from for clarity as to why the transaction has not gone through.
This is part of how banks also ensure the security of your accounts as well!
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