what are Ledger balance and Available balance?

Question

Can you explain those two terms in clear and exact forms?

Answer 1

Ledger balance includes all items such as recent deposits which consist of uncollected funds which may not yet be available for withdrawal; the available balance is the amount of funds from all sources including checks which have cleared and is available for immediate withdrawal.

Usually the ledger balance minus uncollected funds plus pending debits equals available balance. A pending debit is a check which has been presented to the bank for payment but which has not yet been paid.

Answer 2

The Ledger balance is how much money you have in your account, your available balance is how much you can use at that moment. For example, let's say you deposit a $100 check into an ATM. Until someone physically opens the envelope you inserted and verifies that there is actually a check in there AND that the person who wrote the check has the funds to cover it, you don't have access to that money. Your ledger balance will increase by $100 but your available balance won't. Generally, your institution will give you a portion of the funds as a "trust" that you depositied a valid check. Let's say they give you $10 (this is called fundsback). So your ledger would increase by $100 and your available would increase by $10. You could withdraw those $10 immediately.

Answer 3

If your refering to your bank account, then:
Leger Balance is what you have in the bank account
at that time.

Available balance is what you can spend at that time.
(i.e. some checks may have a 2-3 day hold on them
so those funds are not available until the hold expires,
but those funds would be calculated in your ledger balance.)

Answer 4

Before electronic funds are transferred the bank withdrawing the funds (like for your car payment)sends an "e-mail" saying how much money they are planning to withdraw and your bank reserves those funds in your account and they are still in therefor a day or two. It also works that way if you go to a restaurant or pay at the pump. the waitress swipes your card and then brings the slip to sign with a line for the tip and if you add one they adjust the amount without reswiping. the pay at the pump just reserves say $50 and after you are done filling will go back later and take out what the actual amount is.