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Availability Float

February 1st, 2010

Every time you write a check there’s a certain amount of time between when you actually write the check to when the funds are deducted from your checking account. This time can include time taken to mail the check and the time it takes the receiver to get to the bank to cash your check. There’s also the time the banks takes to process the check. Depositing a check isn’t an instant process. This time between writing and deduction from your account is known as an availability float.

During the availability float you’re still able to use the money you wrote the check for in your account, but it’s dangerous to fool around with that money. You should keep track of checks you wrote and how much they were for so you don’t end up with an overdraft fee. The availability float varies greatly from check to check. Most companies will cash checks as soon as they receive them while some people will wait a long time before getting to the bank. You never know how long it’s going to take.

Some banks, depending on your history with you, will allow you access money from check deposits immediately. In most cases however there’s at least some amount of availability float, especially if the check is from a foreign bank. This float period lasts anywhere from a day to a week. Sometimes banks will allow you to access some of the funds before the check has cleared. For example my bank let’s me access the first $100 of any check I deposit immediately. If you balancing your funds between checks you’ve written and checks you’ve deposited but haven’t received credit for yet, it’s best to play cautiously with these situations and not spend money from your account until your checks have cleared.

In the case of ATM withdrawals, there’s no float time at all. As soon as you withdraw funds from an ATM they’re also deducted from your account. There are also situations where your funds are deducted from a check immediately as well. For example if you write a check to someone who has the same bank as you, the funds will be transferred instantly.

If you’re mailing a check there’s basically a guarantee of at least 1 day of float time because of the transit time of your mail. If you have a direct deposit that you know is going to be deposited the next day for sure, then you can be safe to write a check and mail it that day. Of course if you can wait one more day you should. Always be cautious and try not to play around with the availability float of checks you write.

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