Meaning of Available Balance

• The available balance is the amount of cash open for use in a given account. It shows cleared, presented transactions, such a debit card purchases, paid checks, remitted bill payments and cash withdrawals, plus pending transactions, like charge-processed purchases and open posts from gas stations and bars. It may also include deposited money like a direct-deposit paycheck, store refund, or cash deposit. The available balance is the bank's best estimation of ready funds. However, it can sometimes be wrong, so it's still a good idea to keep a running tab of your spending to avoid fees or declined transactions.
  
  

Difference Between Ledger and Available Balance

• The ledger balance is the bank's balance tally after all finalized transactions. Ledger transactions have been settled and closed, and there's little to no chance that these payments or deposits will change. In effect, transactions that show up under the ledger balance are archived permanently, and have been closed and approved by both the payee's bank and the receiver. A ledger balance has other names; some banks use "bank balance" or "statement balance" instead of ledger balance.
  
  

Available Balance and Open Bills

• Available balance transactions stay active, especially in the case of open bills. A hotel's $50 per night incidental hold would show up under the available balance, not the ledger balance. It would only become a ledger transaction if the charge was posted by the hotel to pay for room service or damage. Gas stations and bars may also post a standard amount for a card purchase, such as $50 for a fill-up or tab. This is a placeholder amount subtracted from the available balance. The merchant posts an exact charge after the actual purchase with the correct amount, then lets the placeholder drop without posting, so the customer only pays once.
  
  

Warnings

• Be careful to use the available balance when making out paper checks, not the ledger balance. Otherwise, it's a sure bet that the numbers will be off, resulting in overdraft fees and potentially embarrassing declines at the cash register. Paper check transactions sometimes take a while to post, so it's important to keep a record of all pending payments. Also realize that some banks don't post during weekends and federal holidays, which can have an effect on the available balance posted.