What Are Available Funds?

Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.

Available funds refers to money that can be accessed right away. The term "available funds" is often used when discussing bank accounts, but it can also have applications in lending and investing.

Key Takeaways

• Available funds are money you have to spend, withdraw, or use to pay bills.
• When opening a bank account, it's important to be aware of the funds availability policy so you know when you'll be able to withdraw the money you deposit.
• Available funds can also apply to investment accounts, retirement accounts, and borrowing.
• Available funds and your account balance or current balance may differ.

How Available Funds Work

When funds are available, this simply means you have the ability to use that money in some way. As you complete any of the transactions listed above, your available balance decreases. Your available balance can increase as you make new deposits. You can view your available balance by logging into online banking or your mobile banking app.

If you spend more money than what you have in available funds, that could put your account into overdraft. When that happens, you may be charged one or more overdraft fees until you deposit enough money into your account to bring the balance back into the positive.

Note

Enrolling in your bank's overdraft protection program can help you to avoid high overdraft fees.

Types of Available Funds

Available funds are money that's available to you for some purpose. How this works can vary, based on the situation. As mentioned, you can have available funds in a bank account. However, you may also have available funds in other scenarios.

For example, say that you need to take out a personal loan to pay for an unexpected expense. You apply for a loan online and are approved for $15,000. That $15,000 represents your available funds or the amount you'll pay back to the lender, along with any applicable interest and fees.

Lines of Credit

Available funds or available credit work differently with revolving credit lines. For example, say you have a credit card with a $5,000 limit. You currently have a $2,500 balance on the card. That means the available funds that you can make new purchases against is $2,500. You may have a separate amount that you can use to take cash advances.

Investment Accounts

You can also have available funds when investing for retirement. If you have a 401(k) at work, for example, your available funds can be determined by your plan's vesting schedule. Vesting refers to a process by which you become the owner of the funds in your account, including your original contributions, employer matching contributions, and earnings. Available funds would be the money you could withdraw or borrow against if your plan allows 401(k) loans.

Note

You are always 100% vested in the money you save in an individual retirement account (IRA).

Bank Accounts

Your available funds or available balance in a bank account excludes any pending transactions or check holds. Checks you've written that haven't been cashed, debit card purchases that haven't cleared, or deposits that have yet to post to your account are not included in your available funds—but they can be included in your total account balance.

Your available funds may be less than your actual account balance. This can happen if you have debit transactions that haven't been posted or deposits that haven't cleared. Banks and credit unions can establish funds availability policies in accordance with federal regulations that determine when deposits will clear.

Under federal Regulation CC, these deposits must be made available on the first business day following the banking day of deposit:

• Cash
• Electronic payments, including ACH and wire transfers
• U.S. Treasury checks deposited at a branch or ATM
• U.S. Postal Service money orders deposited at a branch
• Federal Reserve Bank and Federal Home Loan checks deposited at a branch
• State or local government checks deposited in person if the payer and the payee are in the same state
• Cashier's, certified, or teller's checks deposited in person

Generally, you can access up to $200 from checks deposited in person at a teller the next day. Anything above $200 would be available the second business day. Deposits must be made by 2 p.m. to be included in that business day's transactions. Deposits received after 2 p.m. are processed the next business day.

Note

A different funds availability timetable may apply to deposits made using remote deposit capture through your mobile banking app.

It's possible, however, that you could be waiting a little longer for funds to become available after depositing money to your account. Banks can impose longer deposit hold times if:

• You're depositing money into a new account
• Your past account history includes multiple overdrafts
• A deposit is greater than $5,000
• Deposits are made at ATMs that are not owned by your bank or credit union
• The bank believes there's a strong likelihood that deposited check may be uncollectible
• You're redepositing a check that was previously returned unpaid

For example, say you sell your car to a private buyer. The buyer gives you a cashier's check for $10,000 to complete the purchase. Following federal guidelines, the first $200 of the check would be available to you the next business day. However, the bank can hold the remaining $9,800 for up to seven business days to ensure the check will clear before releasing the funds to you.

Some banks and mobile banking apps allow you to get paid up to two days faster when you sign up for direct deposit of your paychecks.

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

1. Bank of America. "Overview of Bank of America Core Checking - Key Policies and Fees." Accessed Jan. 24, 2022.
2. Internal Revenue Service. "Retirement Topics - Vesting." Accessed Jan. 24, 2022.
3. Code of Federal Regulations. "Part 229 - Availability of Funds and Collection of Checks." Accessed Jan. 24, 2022.
4. Consumer Financial Protection Bureau. "How Quickly Can I Get Money After I Deposit a Check Into My Checking Account? What Is a Deposit Hold?" Accessed Jan. 24, 2022.
5. Capital One. "Early Paycheck." Accessed Jan. 24, 2022.

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