Balance vs Available Balance

I haven’t been particularly good at saving money. In fact, the only time I actually tried was when I was in grade school. That was the only time I ever used the piggy bank that an aunt gave me when I was eight years old.

After that, I spent every penny I had on food and things that took my fancy. When I got to college, everything changed. I was away from home and for the first time in my life, I was on my own.

Money for my expenses was sent to me through the bank, so in a way I was forced to transact business with them. I realized then that it was a good thing, learning how to manage my finances on my own.

Bank transactions can be confusing sometimes, especially when it comes to checks that have to be deposited. I receive checks for everything; my birthday, Christmas, and for every occasion imaginable.

These checks I have to deposit to my bank account because they are drawn from other banks. They have to be cleared by sending them back to the issuing bank to verify funding and authenticity.

It takes one to two days for a local check to be cleared. For foreign checks, the process could take one to two weeks. Until it is cleared, the amount cannot be used, withdrawn, or transferred to other accounts.

So the total amount in my bank balance is the sum of all my deposits in the bank including the checks that I deposited, which have to be sent back to the banks where they are issued before they will become available for withdrawal from my account.

My account balance is the actual balance that I have and this is the basis in calculating the interest of all the money I have with the bank. It is also the balance that is printed on my bank statement.

The available balance is the amount of funds that can be withdrawn from my account. It does not include any pending transactions that I have in my account, including the checks that I have deposited.

If I withdraw funds against checks that have not been cleared yet, I will be subjected to charges and fees. So I am very careful to inquire about my available balance before making any withdrawals.

I have since learned how to manage the money that I have, and yes, I have also started to save, making sure that I set aside a certain amount for the future.

Summary
1. Balance is the total amount that a person has in his account, including all pending transactions while, available balance is the amount that is available for transfer or withdrawal.
2. Balance is the basis in computing of interest in accounts that are interest bearing while available balance is not.
3. Balance is the amount that is given when an inquiry is made about how much money is in the account, while the available balance is not always given unless it is specifically asked for.

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