Available vs Posted Balance: Difference and Comparison

The available balance represents the total amount of funds in a bank account that a customer can use for transactions. It includes the posted balance (actual funds in the account) and any additional funds that may be temporarily held due to pending transactions, such as deposits or withdrawals. The posted balance, on the other hand, reflects the real-time amount of money actually present in the account after all transactions have been processed and cleared by the bank.

Key Takeaways

1. The available balance is the amount of money that can be withdrawn or used immediately, while the posted balance is the amount debited or credited to an account.
2. The available balance includes all pending transactions that still need to be fully processed, while posted balance only includes transactions that have been completed.
3. Available balance may frequently change throughout the day, while posted balance is updated less frequently and may not reflect the most recent transactions.

Available Balance vs Posted Balance

Available balance refers to the amount of money in an account that can be used for transactions, accounting for all deposits, credits, and pending transactions. Posted balance refers to the current balance in an account after the bank completes and processes all transactions.

The available balance in the bank account refers to the money in the account at the time of requirement. It denotes the difference between a payment that has been significantly processed and a ledger balance.

Posted balance denotes the current cumulative balance that remains, whether in the personal or business account, for a given time. The posted balance is revised at the end of each day’s bank business and remains constant until the bank closes the following day.

Comparison Table

Feature	Available Balance	Posted Balance
Definition	The amount of money in your account that you can currently use for immediate spending or withdrawal.	The total amount of money in your account, including all completed transactions (debits and credits).
Includes	– Cleared deposits <br> – Cleared withdrawals <br> – Cleared transfers <br> – Pending transactions (subtracted)	– Cleared deposits <br> – Cleared withdrawals <br> – Cleared transfers
Accounts for	Reflects your real-time spending power.	Reflects your overall account activity.
Usefulness	Ideal for avoiding overdrafts and managing daily finances.	Useful for reconciling statements and tracking past transactions.
Accuracy	More accurate for reflecting your usable funds.	More accurate for reflecting your total account value.
Example	– Current balance: $1000 <br> – Pending debit: -$200 <br> – Available balance: $800	Current balance: $1000

What is Available Balance? 

Available Balance is a crucial concept in personal finance and banking. It represents the amount of funds in a bank account that is immediately accessible for withdrawal or use in financial transactions. This balance takes into account various factors and ensures that account holders are aware of the actual funds they can utilize.

Calculation of Available Balance

To calculate the Available Balance, you need to consider the following elements:

1. Current Balance:

The starting point for determining the Available Balance is the current balance in the account. This is the total amount of money present in the account at a specific point in time.

2. Pending Transactions:

Pending transactions include any authorized payments or withdrawals that have not yet been fully processed by the bank. These transactions may include checks, debit card purchases, or electronic transfers.

3. Hold on Funds:

Banks may place a temporary hold on certain funds in the account. This hold can be due to pending transactions, deposits that have not cleared, or other restrictions. The held funds are temporarily subtracted from the Available Balance.

4. Overdraft Protection:

If the account is linked to an overdraft protection facility, the Available Balance may include the approved overdraft limit. This allows account holders to make transactions even if the current balance is insufficient, up to the specified limit.

Importance of Available Balance

1. Avoiding Overdrafts:

Knowing the Available Balance helps account holders avoid overdrawing their accounts. This is crucial in preventing overdraft fees and ensuring financial stability.

2. Budgeting:

Individuals use the Available Balance to track their spending and adhere to budgetary constraints. It provides a real-time overview of funds that can be safely spent or saved.

3. Transaction Planning:

When planning transactions, understanding the Available Balance helps in making informed decisions. It ensures that payments or withdrawals do not exceed the available funds.

Monitoring Available Balance

1. Online Banking:

Most banks offer online banking services that allow customers to check their Available Balance in real-time. This provides instant access to accurate financial information.

2. Mobile Apps:

Mobile banking apps offer convenience by enabling users to monitor their Available Balance on their smartphones. Alerts and notifications are available to keep users informed about transactions and account activity.

3. ATM Receipts:

After completing a transaction at an ATM, the machine provides a receipt that includes the Available Balance. This allows users to review their remaining funds immediately.

What is Posted Balance?

A posted balance refers to the current amount of funds in a financial account after all transactions have been recorded and processed by the financial institution. This balance represents the most up-to-date information regarding the account’s financial status.

Calculation

The posted balance is calculated by taking into account all transactions that have been completed and officially recorded by the bank or financial institution. This includes deposits, withdrawals, transfers, and any other financial activities that impact the account.

Timing

The timing of the posted balance is crucial, as it reflects real-time information about the account. Unlike the available balance, which may include pending transactions, the posted balance only considers completed transactions that have been verified and updated by the financial institution.

Importance

1. Accurate Financial Snapshot: The posted balance provides an accurate snapshot of the account’s current financial standing, allowing account holders to make informed decisions based on real-time information.
2. Transaction Confirmation: It serves as a confirmation that all transactions, including deposits and withdrawals, have been successfully processed and reflected in the account.
3. Budgeting and Planning: Account holders can use the posted balance for budgeting and financial planning purposes, as it reflects the actual funds available for use.

Distinction from Available Balance

While the posted balance represents the real-time status of the account, the available balance may include pending transactions that have not yet been fully processed. Therefore, the available balance might differ from the posted balance, providing users with an additional layer of information about their account’s short-term financial outlook.

Monitoring

Regularly monitoring the posted balance is essential for account holders to track their financial health, identify any discrepancies, and ensure that all transactions are accurately recorded. This proactive approach helps in avoiding overdrafts and managing finances effectively.

Main Differences Between Available Balance and Posted Balance

• Definition:
  • Available Balance: Represents the funds that are currently accessible for withdrawal or use in your account. It considers pending transactions and holds.
  • Posted Balance: Reflects the actual amount of money in your account after all transactions have been processed and officially recorded.
• Timing:
  • Available Balance: Takes into account pending transactions, which may include holds for upcoming expenses. It provides a more real-time view of your usable funds.
  • Posted Balance: Reflects transactions that have been fully processed and officially posted to your account. It provides a historical snapshot.
• Inclusions:
  • Available Balance: Includes both posted transactions and pending transactions that have been authorized but not yet settled.
  • Posted Balance: Only includes transactions that have been fully processed and officially recorded.
• Accuracy:
  • Available Balance: Can change as pending transactions are processed or if holds are released. It may provide a more dynamic and up-to-date view of your financial status.
  • Posted Balance: Represents a more stable and final balance as it considers only fully completed transactions.
• Usage:
  • Available Balance: Useful for making financial decisions in real-time, considering pending transactions and upcoming expenses.
  • Posted Balance: Typically used for reconciling your account and assessing your financial situation based on completed transactions.
• Impact of Holds:
  • Available Balance: May be lower due to holds on certain transactions, reducing the amount available for withdrawal or spending.
  • Posted Balance: Reflects the actual amount available for use after considering any holds that have been released.
• Bank Policies:
  • Available Balance: Influenced by the bank’s policies on holding funds for pending transactions or certain types of deposits.
  • Posted Balance: Represents the final outcome of all transactions based on the bank’s processing timeline.
• Transaction Visibility:
  • Available Balance: Provides visibility into both current and upcoming financial obligations.
  • Posted Balance: Offers a retrospective view of your account’s financial activity after transactions have been completed.

References

1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3033730/
2. https://books.google.co.in/books?hl=en&lr=&id=bbchq6yAoe4C&oi=fnd&pg=PR17&dq=types+of+balance+in+banking&ots=uyDWnco8wu&sig=w3Y-_zzEiQkmo7FRZvSvgdwa4aQ&redir_esc=y#v=onepage&q=types%20of%20balance%20in%20banking&f=false