Ledger Balance

A bank account balance is an ever-changing number. Paychecks, interest payments, and birthday cash are going in from time to time. Meanwhile, ATM withdrawals and charges on your debit card are constantly going out.

To add to the chaos, some of those transactions (the various deposits and withdrawals) take time to post. You may deposit your paycheck on Monday, but the funds don’t clear until Tuesday. Meanwhile, the payment for your cell phone bill that you set up through online bill pay is set to go on the 25th of every month. But it always takes a couple days before the payment goes through.

Thus, you end up with two bank balances: a ledger balance and an available balance.

The ledger balance represents the amount of money currently in your account, ignoring any pending transactions that haven’t cleared yet. The available balance takes these pending transactions into account. It represents what your ledger balance will look like once everything settles up.