Monday, December 12, 2011

Whats the difference between your ledger balance and your available balance?

Yes, your ledger balance includes only things that have cleared the bank, HOWEVER, usually, your available balance is higher than your ledger balance.

This is because if you have overdraft protection, up to a certain amount (usually agreed upon when you open the account), the available balance is higher than what you actually have in your account. Be aware though, this doesn't mean you can just go spend it, it just means you have coverage for it. There are usually extra fees involved if you have checks that don't clear - from your bank AND from the place you wrote the check. All banks are different, some will allow 1-2 of these per month!

This is the bank's coverage for it until your paycheck comes in or to prevent the extra charges you also have from the grocery store or whatever establishment the "hot" check is written to.

Example: If I have $300 overdraft protection, then my ledger balance may be $700, but my available amount is listed as $1000.

Other reasons for the balances to be different -- or the available balance to be LOWER, is if you deposit a check late in the day, that money may not be available for withdrawal until the next business day.

Example: I deposit my paycheck of $200 into my account which already has $500 in it. My available balance is $500, not the ledger balance of $700. The money isn't "officially" there yet.

In this day and age, though, checks and credits/debits are clearing much faster than years ago, when you could write a check on Friday and hope it doesn't clear until the following Tuesday.|||Ledger balance reflects posted transactions. Available balance is the ledger balance minus pending transactions.|||Your ledger balance in a bank account shows money that you have in your account + any pending invoices that have yet to go through.

Your available balance has taken out all pending transactions (or added pending deposits) for you.

For example:

If I had 100.00 in my account, and I wrote someone a check for 5.90 that was pending my account would look like this:

Ledger Balance: $100.00

Available Balance: $94.60|||A bank will only allow you to withdraw a certain

amount of money every 24 hours. Some allow

you to withdraw $400, others as much as $100

more than that.

But your "available balance" reflects how much

you may withdraw at any point of time in any

month; pending checks are going to affect what

your available balance is.

Contrastly, your "ledger balance"--if you're doing

a responsible job of keeping it accurate, by

deducting checks before they clear--should be

less than your bank's recorded balance, when

any checks (even for as little as 1 cent) are still


And when no checks are pending, then your

bank's balance and your ledger balance should

coincide, exactly.|||ledger is the actual balance, available is what you can use. You may have a dopsit that is being held, or a check waiting to clear that will hold up a certain amount of money in your ledger balance.|||Ledger Balance

Balance as of the previous business day reflects all funds in your account, including deposit, withdrawal and other transactions that were posted to your account through the previous business day.

Important Note: This balance does not include unposted transactions such as direct deposit, pending transactions, deposited funds being held or Bank holds (see “available balance”).


Available Balance

Available Balance reflects funds in your account available for immediate use. Your available balance is your balance as of the previous business day’s processing, plus or minus any pending transactions, direct deposits that have not posted, or Bank holds (i.e. Deposited funds being held for verification).|||Your ledger balance is the amount availible BEFORE your pending transactions post. Your Avail. balance is how much you have AFTER your pending transactions post. In other words, you should always go off of your Avail. Balance, not your ledger balance.|||Your available balance usually refers to what you have in your checking account after checks/charges have been posted for that day. The ledger balance is an accounting term. A ledger is a system of keeping track of everything that goes on in your business. The ledger balance adds up all the credits and debits. The debits and credits are ALWAYS equal. The ledger balance is also where your business/personal account stands at a specific time, mostly the end of a month.|||Ledger balance includes those items that have not yet posted to your account.|||Ledger is previous day's balance, and available is just that.|||Your ledger balance is your actually balance. It takes into account checks deposited that have not cleared and purchases on you check card that have no gone through. Your available balance is what you are able to withdrawal


  1. Great information about the bank checks.a cheque is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specified transactional account held in the drawer's name with that institution. ordering checks online

  2. Okay what I had a $1.00 dollar and it says negative balance. And the amount on and it has - can I use it cause I know I didn't use my card after I took out my money last month and now it says negative balance.

  3. My ledger says 3,250 but avaiable is zero but my account was negative $651. Direct deposit of 761 and available still says zero. What's going on?