Available balance

Every banking app shows two numbers for a checking account. The current balance, also called the ledger or posted balance, is the result of everything that has cleared; the available balance subtracts from it the card purchases that are authorized but not yet posted and the part of a recent deposit the bank is still holding. The available balance is the lower of the two on most days, and it is the one the bank uses to decide whether the next payment goes through. It is still not the amount that is free to spend, because it knows nothing about the rent due tomorrow.

In a sentence

• "The app shows $1,240, but the available balance is $500, because $440 of holds and a $300 deposit hold have not cleared."
• "The bank measures an overdraft against the available balance, not the balance printed at the top of the statement."
• "The available balance is what the bank will let you spend today. It is not what is left after the bills."

How it's calculated

Available balance = current balance − pending card purchases − deposits not yet released

Each kind of event moves the two balances differently, and the gap between them is always the sum of what is in flight.

A card purchase happens in two steps: the merchant asks the bank to authorize an amount and the bank places a hold for it, and one to three business days later the merchant settles the final amount and the charge posts. The hold is the merchant's estimate, which is why a restaurant's hold grows by the tip, a gas pump's hold shrinks to the real fill-up, and a hotel's hold can run well above the bill. A direct deposit is available at once, while the first part of a check deposit is usually available the next business day and the rest within a few business days.

An example

A checking account on a Saturday evening, with a hotel stay, a dinner and a tank of gas in flight and a $500 check deposited on Friday.

The bank will approve purchases up to $500, and anything past that is declined or overdrawn even though the statement shows $1,240. By Wednesday the hotel's hold has given way to a $280 bill, the dinner has posted at $77 with the tip, the gas hold has become a $46 fill-up and the rest of the check has been released, and the two balances meet at $837. The last two lines are yours rather than the bank's, and they turn the available balance into what can be spent before the next paycheck without a bill bouncing.

Why it matters

The available balance is the figure the bank measures an overdraft against, so spending to the current balance while holds are outstanding is the most common way an account goes negative; a hotel stay or a rental car can push the gap to several hundred dollars, and a check deposited on Friday is not spendable on Saturday. The figure also says what the bank will approve today and nothing about tomorrow, so the rent due on the 1st sits inside it on the 30th looking spendable. Read the available balance to know whether a purchase will go through, and subtract the bills due before payday to know whether it should.

Available balance versus current balance

The current balance counts everything that has posted; the available balance also counts what is pending, so it is the current balance minus the holds and the unreleased deposits. The current balance is the historical figure and the available balance the forward-looking one. On a credit card the same pair appears as the current balance and the available credit, where a pending authorization reduces the available credit until it settles. See Why transactions show as pending, and why amounts change for the two steps behind every hold.

Common questions

Is the available balance the same as the current balance? No. The current balance is everything that has posted; the available balance subtracts the pending card purchases and the held part of recent deposits, and it is the one the bank acts on.

Can I spend my whole available balance? The bank will let you, which is a different question from whether you should. It does not know about the rent due tomorrow or the automatic payment due on Friday, so the figure to spend against is the available balance minus the bills due before the next paycheck. See Why your budget never matches your bank balance for that subtraction done in full.

How long does a hold stay on my available balance? Usually one to three business days for an ordinary card purchase, longer over a weekend or a holiday; hotel and rental car holds can last up to a couple of weeks after checkout, and a hold that never settles falls off when it expires. A check deposit hold usually ends within a few business days.

Which balance does the bank use for overdraft fees? The available balance, at most banks. An item that exceeds it is declined, returned or paid into an overdraft, so pending purchases that have not posted yet are what make an account overdraw on a day when its posted balance looked sufficient.

Go deeper

• Why your budget never matches your bank balance subtracts the committed money from the balance to reach the figure that is actually free, with a worked example on the 18th.
• Why transactions show as pending, and why amounts change explains the two steps of a card purchase and why holds grow by a tip, shrink to a fill-up, or vanish and return.
• How to forecast your cash flow for the next thirty days runs the balance forward date by date to find the low point before it happens.

Where it shows up in Zypper

Zypper counts the money in flight from the moment the bank reports it. Pending transactions appear as soon as your bank shares them, marked pending, and count toward the month's spending from the moment they appear; while a transaction is pending, its category and merchant can be edited but its date, review status and budget settings are locked until it posts. Banks that report only posted transactions show a purchase a day or two later, and when the posted version arrives Zypper matches it to the pending one. See Managing and reviewing transactions and Missing or delayed transactions for the details, or get started with Zypper to see your pending purchases counted.